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Govt should take control of Vodafone Idea, says Deutsche Bank report

The telecom company has sought an extension of the moratorium till April 2023 to pay over Rs 8,000 crore dues related to spectrum purchase

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Vi’s existing shareholders would be heavily diluted as the government debt is roughly six times the company’s current market capitalisation

Aneesh Phadnis Mumbai
The government should convert Vodafone Idea’s (Vi) debt into equity to avoid a duopoly in the telecom sector, Deutsche Bank Research said in its report on Monday. This, the bank suggested, would be the only viable solution in the backdrop of the Supreme Court dismissing the telecom company’s application for recomputation of adjusted gross revenue (AGR) dues.

“The vast majority of Vi’s debt is spectrum and AGR obligations, and the company will need to take on 5G spectrum at some point too. Private investors are extremely unlikely to save the company, given successive governments seeing telecom capital as something to target,”

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First Published: Jul 26 2021 | 11:02 PM IST

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