By Aditya Raghunath
Investing.com -- Multiple media reports say that on June 7, Kumar Mangalam Birla told the government in a letter that he was willing to give up his promoter stake in Vodafone Idea Ltd (NS:) to a state-owned or “domestic financial entity” to ensure the company remains afloat.
He said that without immediate government support, Vodafone Idea will be at an "irretrievable point of collapse".
"Happy to work with the government to urgently explore all possible solutions, without consideration of our private interest," he said.
The stressed telecom company has a debt of Rs 1.8 trillion.
This revelation comes a week after a Deutsche Bank (DE:) Research that said the government should take control of Vodafone (LON:) India. “The vast majority of Vi’s debt is spectrum and AGR obligations, and the company will need to take on 5G spectrum at some point too. Private investors are extremely unlikely to save the company, given successive governments seeing telecom capital as something to target,” said Deutsche Bank research analyst Peter Milliken said in a report.
“So, we think the only viable solution for India to keep Vi is for the government to convert its debt into equity, preferably while merging it with BSNL, and then providing it a clear commercial mandate based on profitability targets and incentives,” said the report.
Vodafone Idea shares are trading at Rs 8.3 as of this report.
KM Birla Says Ready to Give Up Vodafone Idea Stake to Government - Investing.com India
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