Vodafone Idea has said that the government does not want to actively run a loss-making company
Vodafone Idea Ltd. said the government does not want to actively run unprofitable phone operators after the board acceptance a rescue plan made the state the largest shareholder with a 36% stake in the company.
Ravinder Takkar, chief executive officer and chief executive officer of Vodafone Idea, told reporters on Wednesday: “They don’t need to want to take over the company’s operations. “They want three private companies in the market, they want promoters to run this company,” he said, referring to a widely used term in India for founding shareholders and control.
Takkar’s comments were intended to reassure investors and Vodafone Idea shares jumped 11% in Mumbai trading on Wednesday after news of the bailout sent 21% drop Yesterday. The restructuring will not only lead to an impairment of all current shareholders of the company, including the founders, but will also eliminate the need for immediate cash outlays from the non-executive operator. besieged wire, a joint venture between the British Vodafone Group and the consortium of Indian billionaire Kumar Mangalam Birla. . Both will now become significant minority shareholders in the company.
Birla stepped down as the company’s non-executive chairman in August, whose survival is threatened by a government claim. The rescue measure is now seen as a deterrent for the company that was losing customers after a fierce price war broke out in 2016 when Mukesh Ambani, Asia’s richest man, joined and raised telecommunications market of India. Many private phone operators withdrew from the market, merged with rivals or filed for bankruptcy after Reliance Jio Infocomm Ltd. of Ambani attracts subscribers with cheap data and free calls.
‘Stay healthy’
“The promoters accepted a substantial dilution to support the company’s balance sheet, the promoters wanted the company to do well,” says Takkar. He said there were no conditions for the Indian government to nominate a board member, adding that “the government has no intention of having a board member.”
Vodafone Idea announced plans in 2020, raising 250 billion rupees ($3.4 billion) to help the company win the broadcast wave in a planned spectrum auction as well as boost its telecom infrastructure. their own information. It was hoped to be able to raise funds following the government bailout, but the company has not had much success so far.
“Vodafone Idea has been engaged with investors for several months,” said Takkar. “There is huge interest from international investors, and the equity conversion will be a positive sign for investors and the fundraising process,” he said.
