Tata Teleservices Says It Will Not Convert Interest On AGR Dues To Equity

Tata Teleservices (Maharashtra) Ltd. said it wouldn’t convert interest on dues owed to the government into equity as the interest amount eligible for conversion is much lesser than expected and calculated by the carrier.

The firm had worked out the net present value of the interest that will accrue on the deferred payment of adjusted gross revenue dues to be about Rs 850 crore, subject to confirmation by the telecom regulator, it said in a statement. “The Department of Telecommunications in response has informed the company that the NPV of the interest which is eligible for conversion into equity is only Rs 195.22 crore.”

So, “…the board in the meeting held on Feb. 1, 2022 has decided to withdraw its desire for conversion”, the company statement said.

Last year, India had allowed to defer repayment of spectrum liabilities and statutory dues for four years to help struggling telecom operators. And the government offered a one-time opportunity to convert the NPV of the interest that will accrue on the deferred payments into equity.

On Jan. 11 this year, Tata Teleservices had told the bourses that it wanted to opt for equity conversion. That would have led to dilution to all the existing shareholders of the company, including the promoters. After the conversion, the Government of India was expected to hold 9.5% of the total outstanding shares of the company.