New Delhi: A senior official said on Thursday that the government may come out with detailed guidelines for converting interest payment liabilities of telecom companies into equity within a month.
Under the telecom reform package announced last year, three debt-ridden telcos – Vodafone Idea Ltd (VIL), Tata Teleservices Ltd (TTSL) and Tata Teleservices (Maharashtra) Ltd (TTML) – have proposed to change their respective interest liabilities. . in government equity
After conversion of liabilities, the government is estimated to hold 35.8 per cent stake in VIL and around 9.5 per cent in TTML and TTSL.
“The details of converting the dues into equity have to come from the finance ministry. DIPAM (Department of Investment and Public Asset Management) can work out the details and then send it to the Department of Telecommunications (DoT). The process should take more than a month. Don’t take it,” said the senior government official.
VIL has estimated the interest liability payable to the government at about Rs 16,000 crore, TTSL at around Rs 4,139 crore and TTML at Rs 850 crore.
On Wednesday, Telecom Minister Ashwini Vaishnav said that even after converting the dues into equity, the liability to pay past and future debt will remain with the telecom companies.
Vaishnav had said on Wednesday, “The government will remain investor only. The companies will be run by professionals. All debt liabilities will remain the responsibility of the companies. The companies have given us a commitment.”
VIL has proposed to allot preference shares to the government at Rs 10 per share, which according to analysts is at a 58 per cent premium over the share price as on the relevant date of August 14, 2021.
When asked whether the government would be responsible for paying for the upcoming spectrum auctions, Mr Vaishnav had said that the entire responsibility of paying for radio waves would be with the companies and there would be no burden on the government.
He had also said that the government has extended a helping hand as part of the telecom reform package to ease the burden on them, save jobs as well as ensure healthy competition in the industry.
Vaishnav had said, “We will exit the companies at an appropriate time. The government will not interfere in the day-to-day operations of the company. They will continue to be managed professionally.”
The Telecom Ministry had also said on Wednesday that the three companies would not become public sector undertakings even after getting the government’s stake.
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