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

NEW DELHI: In a major growth, Bharti Airtel is known to have approached the government for swapping its statutory dues with equity, one thing that has been executed within the case of beleaguered Vodafone Idea.The firm is known to have excellent govt fee 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 part of a fast-growing enterprise which carries prospects of a progress in share value and resultant valuations. “A proposal to this effect is understood to have been submitted to the department of telecom,” a supply stated.
Airtel has not formally commented on the matter as but.
The method to swap the excellent statutory fee dues with equity had been initiated by the division of telecom to assist the business, significantly loss-making Vodafone Idea 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 main points on the Bombay Stock Exchange. The firm 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 “a chance of realising positive returns” from the Airtel equity, contemplating that the corporate has been rising in profitability. This will probably be not like Vodafone Idea the place the worth of its stake worth has to this point solely fetched detrimental returns with the corporate’s scrip remaining under Rs 10 for many of the interval of govt’s holding.
Govt had transformed the Voda Idea 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.