Amid growing debt pressure, Kumar Mangalam Birla has told the government he is willing to offer his stake in Vodafone Idea Limited (VIL) to any state-owned or “domestic financial entity” to keep the stressed telecom company afloat, report a media source.
VIL’s promoter and chairman of the Aditya Birla Group Kumar Mangalam Birla made the suggestion in a letter to union cabinet secretary Rajiv Gauba on June 7.
VIL has a debt of around Rs 1.8 trillion, which includes deferred spectrum obligations and adjusted gross revenue liabilities. Its board had last September announced a plan to raise Rs 25,000 crore but investors have not been forthcoming in the absence of government support.
Kumar Mangalam Birla’s letter highlighted the need for urgent measures from the government while offering to give up control of the company.
“It is with a sense of duty towards 27 crore Indians connected by VIL, I am more than willing to hand over my stake in the company to any entity-public sector/government/domestic financial entity or any other that the government may consider worthy of keeping the company as a going concern,” Birla said in his letter.
Kumar Mangalam Birla owns over 27% stake in VIL, while Vodafone Plc holds over 44%. The current market capitalisation of VIL is over Rs 24,000 crore. The two promoters have decided against infusing fresh funds in the company. Vodafone Plc has already written off all its investment in VIL following continuous losses.
The Indian business tycoon further said that VIL’s financial situation will drive its operations to an irretrievable point of collapse without immediate active support from the government on these three issues.
Last month the Supreme Court dismissed petitions of VIL and Bharti Airtel seeking correction in alleged errors in calculating the AGR. VIL had calculated its remaining AGR dues at around Rs 21,500 crore after making a payment of Rs 7800 crore. However, the department of telecommunications concluded the company’s total AGR liability of around Rs 58,000 crore.
(Report is based on Business Standard inputs)
