Airtel seeks swap of dues to government with equity like Vi

New Delhi: Bharti Airtel is understood to have contacted the government to swap its statutory dues with equity, something that was done in terms of Vodafone idea. The company is estimated to be outstanding outstanding government payments of more than Rs 70,000 crore, including Rs 40,000 crore Agri dues.
Sources said that Airtel believes that the measure will help the government to preserve cash, enabling to become part of a fast growing venture, which carries the share price and the possibilities of increasing the resulting assessment. A source said, “A proposal to this effect has been submitted for the telecom department.” Airtel has not yet officially commented on the matter.
The formula to swap the outstanding statutory payment arrears with equity was initiated by the Telecom Department to continue the industry, especially vodafone ideas, fiscal challenges, and to continue as a concern.
According to the details of Bombay Stock X Change, Airtel’s current market cap is about Rs 10.5 lakh crore. The company will need to transfer about 6% equity to the government to vacate its statutory arrears. Airtel’s shares shut down the day of Rs 1,845 down on BSE at Rs 1,845.
Market analysts believe that Govt has “a chance to feel positive returns” from Airtel Equity, given that the company is increasing in profitability. This will be contrary to the Vodafone idea, where its share value has so far received only negative returns, the company’s scrip is less than Rs 10, which is for the most period of the government’s holding.
The government converted the Voda Idea statutory loan into equity at a price of Rs 10 per share. The current price is 8 rupees.