New Delhi: The government is expected to come out with detailed guidelines for conversion of interest payment obligations from telecommunications players into equity in a month, a senior official said on Thursday.
Under the telecommunications reform package was announced last year, three Telcose Ridden – Vodafone Ideas Ltd (VIL), Tata Teleservices Ltd (TTSL) and Tata Teleservices (Maharashtra) Ltd (TTML) – has been proposed to convert their respective interest obligations paid to the Government become equity.
Post the conversion of liabilities, the government is projected to have 35.8 percent of shares in the vil and around 9.5 percent of their respective shareholdings in TTML and TTSL.
“Details of contributions to equity must come from the Ministry of Finance.
Dipam (Department of Investment and Public Asset Management) is likely to work on details and then send it to the Telecom Department (DOT).
The process must not take more than a month,” said senior government officials to PTI.
Vil estimates the interest contribution of interest paid to the government around RS 16,000 Crore, TTSL around Rs 4,139 Crore and TTML around RS 850 Crore.
On Wednesday, Telecom Minister Ashwini Vaishnaw said that even after conversion of contributions became equity, the responsibility for paying past and future debts would remain with telecommunications companies.
“The government will only remain an investor.
The company will be run by professionals.
All debt obligations will remain the responsibility of the company.
The company has given us a commitment,” Vaishnaw told PTI.
The VIL has proposed to allocate preferential shares to the government with Rs 10 per share, which according to analysts are at 58 percent premiums based on stock prices on the relevant date of August 14, 2021.
On whether the payment responsibility for the upcoming spectrum auction will be on the government, Vaishnaw Said the company will have all responsibility for radiowave payments and there will be no burden on the government.
He also said the government had just extended his hand as part of the telecommunications reform package to reduce the burden on them, save and create jobs and ensure healthy competition in this industry.
“We will get out of the company at the right time.
The government will not interfere with the daily operations of the company.
They will continue to be managed professionally,” Vaishnaw said.
The Telecommunications Ministry, on Wednesday, also said that three companies would not be a public sector business even after the government received shares in it.