By Aditya Raghunath
Investing.com -- A report by The Economic Times on September 15 said that government sources have told them the government is open to picking up a stake in Vodafone Idea Ltd (NS: VODA ). However, the government will not be infusing any funds into the beleaguered debt-ridden telecom company.
The government is open to taking this step to reassure shareholders and investors about their confidence in the loss-making telco.
On September 14, the stock gained a little over 10% after news agency Reuters said banks led by State Bank Of India (NS: SBI ) had asked the government to go easy on Vodafone Idea, and it give the company time to repay its taxes and spectrum fees.
According to the company’s June 2021 earnings report, its gross debt was Rs 1.92 lakh crore, which included deferred spectrum payment of Rs 1.06 lakh crore and AGR dues of Rs 62,180 crore.
In June this year, Vodafone Idea’s then non-executive Chairman Kumar Mangalam Birla said that unless there is help from the government, the telecom’s "financial situation will drive its operations to an irretrievable point of collapse".
The ET report said that the government’s decision to pick up stake in Vodafone Idea is purely to allay investor concerns, and that it would not participate in management or running of operations.
Vodafone Idea closed at Rs 8.75 on September 14.
Add Chart to Comment
We encourage you to use comments to engage with users, share your perspective and ask questions of authors and each other. However, in order to maintain the high level of discourse we’ve all come to value and expect, please keep the following criteria in mind:
- Enrich the conversation
- Stay focused and on track. Only post material that’s relevant to the topic being discussed.
- Be respectful. Even negative opinions can be framed positively and diplomatically.
- Use standard writing style. Include punctuation and upper and lower cases.
- NOTE: Spam and/or promotional messages and links within a comment will be removed
- Avoid profanity, slander or personal attacks directed at an author or another user.
- Don’t Monopolize the Conversation. We appreciate passion and conviction, but we also believe strongly in giving everyone a chance to air their thoughts. Therefore, in addition to civil interaction, we expect commenters to offer their opinions succinctly and thoughtfully, but not so repeatedly that others are annoyed or offended. If we receive complaints about individuals who take over a thread or forum, we reserve the right to ban them from the site, without recourse.
- Only English comments will be allowed.
Perpetrators of spam or abuse will be deleted from the site and prohibited from future registration at Investing.com’s discretion.
The Birlas are very manipulative.Like 0