A senior official said on Thursday that the government is expected to come out with detailed guidelines for the conversion of interest payment liabilities of telecom players into equity within a month.
Three debt-ridden telcos -- Vodafone Idea Ltd VIL Tata Teleservices Ltd TTSL and Tata Teleservices Maharashtra Ltd TTML -- have proposed to convert their interest liabilities payable to the government into equity under the telecom reforms package announced last year.
The government is projected to have a 35.8 per cent stake in VIL and around 9.5 per cent shareholding each in TTML and TTSL after the conversion of the liabilities.
The finance ministry has to come up with the details of the conversion of dues into equity. The DIPAM Department of Investment and Public Asset Management is expected to work on the details and then send it to the Department of Telecom DoT The process should not take more than a month, a senior government official told PTI.
VIL estimates the interest liability dues payable to the government at around Rs 16,000 crore, TTSL at around Rs 4,139 crore and TTML around Rs 850 crore.
Even after the conversion of dues into equity, the liability to pay past and future debt will remain with the telecom companies, said Ashwini Vaishnaw, Minister of Telecom.
The government will only be an investor. The companies will be run by professionals. The companies will be responsible for all debt liabilities. Vaishnaw told PTI that the companies have given us commitment.
According to analysts, VIL has proposed to allocate preferential shares to the government at Rs 10 per share based on the share price at the relevant date of August 14, 2021, which is a 58 per cent premium.
Vaishnaw said that companies will have the entire responsibility for the payment of radio waves and there will not be a burden on the government if the upcoming spectrum auction will be on the government.
He said that the government had just extended a helping hand as part of the telecom reforms package to lower burden on them, save and create jobs and ensure healthy competition in the industry.
At an appropriate time, we will exit from the companies. The government will not interfere in the day to day operations of the company. Vaishnaw said they will continue to be professionally managed.
The telecom ministry said that the three companies would not become public sector undertakings even after the government gets a stake in them.