Debt-laden Vodafone Idea’s equity deal with American Tower Corporation has missed the deadline. The mobile service company was supposed to issue shares worth ₹1,600 crore to the tower company in lieu of its dues. However, one of the conditions set by ATC was that they would take up equity in the company after the government completed the conversion of Vodafone Idea’s debt to equity.
The government has so far remained silent on converting Vodafone Idea’s debt to equity. The company, which owes nearly ₹2-lakh crore in debt to the government, has been discussing with the Centre for over a year about the debt-to-equity conversion proviso. The government has expressed reluctance to enact an obligation to convert Vodafone Idea’s debt to equity since the Department of Telecommunications continues to deliberate on the issue despite receiving the required approvals from the SEBI and the Finance Ministry.
“As the company has not received any communication from the Government of India on such conversion, the issuance of OCDs to ATC has not been completed, within the validity period of the shareholders resolution (i.e. 15 days from the date of passing of the resolution). The company is in discussion with ATC for extension of the agreement and a fresh approval sought as required,” said Vodafone Idea in its note to the exchanges.