Like Voda Idea, now Airtel looks to convert govt’s statutory debt with equity swap – Times of India

NEW DELHI: In a big improvement, Bharti Airtel is known to have approached the government for swapping its statutory dues with equity, one thing that has been finished within the case of beleaguered Vodafone Concept.The corporate is known to have excellent govt cost dues of over Rs 70,000 crore, together with Rs 40,000 crore of AGR dues.
Sources stated that Airtel believes that the measure will assist it preserve money, whereas additionally enabling the government to be an element of a quick-rising enterprise which carries prospects of a development in share value and resultant valuations. “A proposal to this impact is known to have been submitted to the division of telecom,” a supply stated.
Airtel has not formally commented on the matter as but.
The system to swap the excellent statutory cost dues with equity had been initiated by the division of telecom to assist the business, notably loss-making Vodafone Concept tide over the monetary challenges and proceed as a going concern.
Airtel’s present market cap is round Rs 10.5 lakh crore, as per the small print on the Bombay Inventory Alternate. The corporate will want to switch round 6% equity to the government to clear its statutory dues. Shares of Airtel closed the day at Rs 1,845 on the BSE, down 2%.
Market analysts consider that govt has “an opportunity of realising constructive returns” from the Airtel equity, contemplating that the corporate has been rising in profitability. This will likely be not like Vodafone Concept the place the worth of its stake worth has to this point solely fetched unfavourable returns with the corporate’s scrip remaining beneath Rs 10 for many of the interval of govt’s holding.
Govt had transformed the Voda Concept statutory debt into equity at a value of Rs 10 per share, which is the face worth. The present value of the corporate’s share is Rs 8, down one per cent at shut on Thursday.