A difficult decision awaits Vodafone Idea after one promoter, Kumar Mangalam Birla offered to give up his stake.
The Modi government where the matter now rests will have to now take a tough call on a possible merger with BSNL which is already in financial problems or do a fire sale a la Satyam as Birla has already offered his equity but that is a long drawn out process.
The issue which is not clear is the Vodafone stance on Birla offering his equity as the other big stakeholder is Vodafone.
Till the final decision emerges there will be considerable uncertainty around Vodafone Idea and the ball is now in the government’s court.
Kumar Manglam Birla, the chairman of Aditya Birla Group, has written to the Cabinet Secretary saying that he is ready to hand over his stake in Vodafone-Idea to any government entity.
In a letter to Cabinet Secretary Rajiv Gauba on June 7, Birla said that, with a “sense of duty” towards 27 crore Indians connected with Vodafone Idea, Birla is willing to hand over his stake to public Sector Unit (PSU), a government entity or any domestic financial entity, or any other entity that the government may consider worthy of keeping the company as a going concern.
Birla said that VIL has been trying to raise Rs 25,000 crore to sustain VIL operations and pay regulatory and governmental dues.
He said that foreign investors wanted to see a clear government intent to have a three-player telecom market.
In the letter, Birla sought clarity on adjusted gross revenue (AGR), adequate moratorium on spectrum dues and floor pricing adding that without immediate and active government support VIl’s operations will be at an “irretrievable point of collapse”.
He also said that investors had also sought clarity on these issues.
Birla said that he and his team would be more than happy to work with the government to urgently explore all possible options to save the company and without any consideration of our private interest, Birla said.