KM Birla Says Ready to Give Up Vodafone Idea Stake to Government

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KM Birla Says Ready to Give Up Vodafone Idea Stake to Government
Credit: © Reuters.

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: VODA ) 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: DBKGn ) Research that said the government should take control of Vodafone (LON: VOD ) 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.

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  • Mohit Dwivedi @Mohit Dwivedi
    The whole story of collapse start from telecom scam and 122 circle license. Now the court said there was no telecom scam than why companies suffered then and still.
    Like 0
    • Lalit Shah @Lalit Shah
      who's scams
      Like 0

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  • Mohit Dwivedi @Mohit Dwivedi
    Why govt will acquire a company. Govt has its own. It will make a best infrastructure in 1.8 trillion. Why state move to loss making acquisition. Vodafone has everything to change whole story of Vi but not willing to do.
    Like 1
  • Nilesh Jadhav @Nilesh Jadhav
    Birla is using this company income to increase business in other field . now Idea will shouting down
    Like 0
  • Rajendra Kulkarni @Rajendra Kulkarni
    Duopoly of Jio and Airtel will harm India more than this takeover.
    Like 1
  • Bishnu Kant Agrawal @Bishnu Kant Agrawal
    What about handing over Grasim.
    Like 1
  • Narasimham Sv @Narasimham Sv
    vodafone and birlas looted company in correct manner and saying , pls save us
    Like 3
  • Amrit Khanna @Amrit Khanna
    BSNL should take over Voda & do something to revive.
    Like 5
  • alok mahato @alok mahato
    BSNL should takeover. BSNL will get huge customer base & good infrastructure. It will help BSNL to become a good player in the existing market.
    Like 2
  • Prinse Maddheshiya @Prinse Maddheshiya
    Good step
    Like 1
  • Harpreet Grewal @Harpreet Grewal
    First merging after some year privatation
    Like 1
  • Abhi Abhi @Abhi Abhi
    Modi will not going to hurt Mukhes
    Like 1
    • Alok Shukla @Alok Shukla
      @Abhi Abhi IT is your prejudice only, modi G works for India and Indians Only.
      Like 2
    • Shailesh Goltekar @Shailesh Goltekar
      Looking at the Government's disinvestment plans and soft corner with Jio, it looks to be difficult...!
      Like 0

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