Birla Offers To Hand Over Vi Stake
- ByStartupStory | August 3, 2021
Birla offers to hand over Vi stake to the Government as a last resort to keep the telecom company from collapsing. In a letter to cabinet secretary Rajiv Gauba in June, Birla expressed the group’s inability to fund the company any further. “It is with a sense of duty towards the 270 million Indians connected by Vodafone Idea, 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 the letter. On July 26, Mint reported that Vodafone Idea’s controlling shareholders, UK’s Vodafone Group Plc and India’s Aditya Birla Group, were open to ceding control of the company if a strategic investor wants to take over. The development made ripples amidst the Vi stake promoters, but it hardly yielded any fruitful result, thus making the revival or rather survival ofthe telecom company at further uncertainty.
Birla, who owns around 27% of Vodafone Idea, said investors are unwilling to put money into the company without clarity on its adjusted gross revenue (AGR)-related liability, moratorium on spectrum payments and most importantly, a floor pricing regime above the cost of service. Without immediate active support from the government on the three issues by July, the financial situation of Vodafone Idea will deteriorate further to an “irretrievable point of collapse”, Birla said in the June 7 letter. Vodafone Idea has recently expressed its inability to pay the telecom department the instalment of ₹8,292 crore that is due on April 9, 2022, since the company’s cash will be used for payment of AGR dues. The company has reported a loss of around ₹7,023 crore for the quarter ended March. It had posted a loss of ₹11,643.5 crore in FY20.
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