Kumar Mangalam Birla returns to Vodafone Idea board after 20 months hiatus
Kumar Mangalam Birla returns to Vodafone Idea board after 20 months hiatus
After his resignation in August 2021 billionaire industrialist Kumar Mangalam Birla has once again, after 20 months hiatus, joined the Vodadone Idea. He was Chairman of the company until his resignation. He will head Vodafone as a non-independent and non-executive additional director, subject to shareholder approval.
The Aditya Birla Group Chairman Kumar Mangalam Birla’s rejoining on Thursday comes in a move potentially aimed at restoring investor confidence in the beleaguered telecom operator.
Vodafone Idea sees Birla’s rejoining as reposing of faith which has for the past three quarters alone posted combined losses close to
Rs 23,000 crore, amid a mounting pile of debt and regulatory dues.
He stepped down from the company in a bid to distance himself from the company citing ‘dire financial conditions’, which has been in talks with investors to raise funds to the tune Rs 11,000 crore via a convertible debt structure to infuse further promoter equity as well as fund Vi’s massively lagging capex towards maintenance and upgradation of network services.
In a long awaited move, the government in February agreed to convert Vodafone Idea’s accrued interest worth over
Rs 16,000 crore on deferred adjusted gross revenue (AGR) dues into equity at Rs 10 a share. Earlier, the government had also stressed that promoters of the company had agreed to infuse more capital in the company following which the equity conversion was done.
The move by Birla comes after the government received an assurance from the promoters of the carrier that they are committed to the company and will bring in necessary funds.
The conversion which has been hanging fire for a year made the government the singlelargest shareholder in the company.
In a statement to the media by the Government sources the decision to convert the dues into equity was taken following assurances from the group of its continuing commitment to Vi.
However, sources reveal that while Aditya Birla group is open to offloading a sizable equity directly or via a convertible structure to potential investors, it is yet to take final call on offering corporate guarantees on loans likely to be raised by the company.
In the absence of a guarantee or such from the group, it may be difficult for an external investor to take a long term view on the company..However, KM Birla’s joining the board definitely comes as a confidence boost for investors and lenders.
News input KV Raman
