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Tata Tele opts for conversion of interest to equity, Centre to hold 9.5%

Tata Teleservices follows Vodafone Idea in converting interest on dues to equity after having taken a four-year moratorium on payments of AGR dues.  (Priyanka Parashar/Mint)Premium
Tata Teleservices follows Vodafone Idea in converting interest on dues to equity after having taken a four-year moratorium on payments of AGR dues.  (Priyanka Parashar/Mint)

  • The company told the stock exchanges on Tuesday that the conversion will be 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

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NEW DELHI : Tata Teleservices opted for converting the interest from adjusted gross revenue dues amounting to 850 crore to equity, following which the government will hold 9.5% in the company.

The Mumbai-based company told the stock exchanges on Tuesday that the conversion will be 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.

Tata Teleservices follows Vodafone Idea in converting interest on dues to equity after having taken a four-year moratorium on payments of AGR dues.

"It is now informed that 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 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 including Section 62(4) and Section 53 of the Companies Act," Tata Teleservices said in a statement to the exchanges.

The Net Present Value (NPV) of this interest is expected to be about 850 crore as per the company’s best estimates, subject to confirmation by the DoT. It will also communicate its decision to the department.

It added that the average price of the company’s shares at the relevant date of August 14, 2021, as per the calculation method provided works out to be about 41.50 per share, subject to final confirmation by the DoT.

"In case of conversion, it will result in dilution of all the existing shareholders of the company, including the promoters. Following conversion, it is expected that the Government will hold approx. 9.5% of the total outstanding shares of the company," it added.

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