Following in the footsteps of Vodafone Idea, Tata Teleservices (Maharashtra) announced on Tuesday that it will convert the interest on AGR dues into equity, with the government controlling around 9.5% of the firm following the conversion.
According to the company’s best estimates, the net present value (NPV) of this stake is projected to be about Rs 850 crore, subject to confirmation by the Department of Telecom, it said in a regulatory filing.
Post conversion, it is expected that the government will hold about 9.5% of the total outstanding shares of the company. ”…pursuant to the Empowered Committee of the Board of Directors, at its meeting held on January 11, 2022, the company is expressing its desire for the conversion of the full amount of such interest related to AGR (Adjusted Gross Revenue) dues into equity subject to a mutual agreement on the terms and conditions, including, the governance of the company post-conversion of the interest amount into equity shares and various regulatory/legal provisions…,” Tata Teleservices (Maharashtra) said in a BSE filing.
According to the computation technique presented in the DoT communication, the average price of the company’s shares at the relevant date of August 14, 2021, works out to be around Rs 41.50 per share, subject to final confirmation by the telecom department.
“In the event of conversion, all current shareholders of the firm, including the promoters, will be diluted,” as per the filing.
Earlier on Tuesday, Vodafone Idea (VIL) said that it has opted to convert about Rs 16,000 crore of interest dues to the government into equity, resulting in a 35.8% stake in the business.
On October 26, the TTML board approved the postponement of its AGR dues.
With a market valuation of Rs 56,898 crore, TTML has surpassed Tata Communications, Voltas, Trent, Tata Elxsi, Indian Hotels, and Tata Chemicals, all of which have vastly greater revenue.
TTML has made a profit in only two of the 82 quarters since 2001, according to ACE Equities statistics — in March 2019 and June 2010. At the end of FY21, the firm had a total debt of Rs 19,429.22 crore.