Vodafone Idea Crisis: Bank to DoT, convert debt to equity
The future of Vodafone-Idea has been questioned after the recent Supreme Court verdict. The company has a total debt of Rs 1.8 lakh crore. This also includes dues to banks. Due to this the ongoing financial crisis in the telecom sector has also emerged.
Now the Department of Telecommunication (DoT) has also become active to help this sector. DoT has discussed with banks about the ongoing financial crisis in this sector. According to a report in the Economic Times, officials familiar with the matter say that the State Bank-led banks have given the option of converting Vodafone-Idea’s debt into equity. Bank officials say that so far Vodafone-Idea has not defaulted in loan repayment. So they cannot take any action. However, banks have raised concerns about their loan repayment.
DoT took steps to save the company: According to officials, banks have said that DoT should take steps to save Vodafone-Idea. He says that if Vodafone-Idea shuts down or goes bankrupt, it will cause more loss to the government than the banks. With regard to Reliance Communication (R-Com), which is facing insolvency process, banks have asked DoT not to cancel its telecom license. Banks said that if this happens, then the entire insolvency process will end.
Whose stake in Vodafone-Idea: Aditya Birla Group has 27.66 percent in Vodafone-Idea, which is the third largest telecom company in the country. At the same time, UK company Vodafone Plc holds 44.39 percent stake. The remaining stake is with the public shareholders.
Kumar Mangalam Birla offered his stake to: Aditya Birla Group chairman Kumar Mangalam Birla has offered to give his stake to the government, a government company or any other company, to save Vodafone-Idea. In this regard, Birla had sent a letter to Cabinet Secretary Rajiv Gauba in June. On the other hand, banking sources say that Vodafone Plc is also ready to give its stake free of cost.
Vodafone-Idea has more than 28 crore customers: Reliance Jio, the telecom subsidiary of Reliance Industries, is the largest company in the country in terms of customers. According to TRAI data, Reliance Jio had 42.76 million subscribers as of 30 April 2021. At the same time, Bharti Airtel was in second place with 35.29 crore subscribers. Vodafone-Idea had 2819 million subscribers.
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