Tata Teleservices (Maharashtra) Limited (TTML) has said that it will not opt for conversion of interest related to AGR dues into equity, as the interest amount eligible for such conversion has turned out to be far lesser than the company’s own calculations.
TTML had initially decided to go for conversion of interest on AGR dues into equity and had also communicated its decision to the telecom department.
In response, the telecom department told the company that the NPV (net present value) of the interest, which is eligible for conversion into equity, is only Rs 195.22 crore as against the company’s calculation of Rs 850 crore, Tata Teleservices (Maharashtra) said in a regulatory filing on February 1.
“As the interest amount eligible for conversion is much lesser than as expected and calculated by the company, the board of directors…in its meeting held on February 1, 2022, has decided to withdraw the desire expressed for conversion,” the filing said.
The company added that it is “not desirous of opting for conversion of interest into equity”.
Last month, Tata Teleservices (Maharashtra) had said it will opt for conversion of the interest amount on AGR dues into equity and post-conversion, the government’s holding in the company is expected to be around 9.5 per cent.
The telecom sector had got a shot in the arm with the government last year approving a blockbuster relief package that included a four-year break for companies from paying statutory dues, permission to share scarce airwaves, change in the definition of revenue on which levies are paid and 100 per cent foreign investment through the automatic route.
The government had also given telcos the option to convert the interest amount pertaining to the moratorium period into equity.