Recently the GOI decided to convert the VI’s interest payment obligations during the moratorium period into preferential equity. Doing so gives GOI 32.09% ownership of the company. The details for the same are embedded on page 18 of the EGM minutes dated 31st Jan 2023. The interest amount under consideration was approximately Rs 16 K Cr. The GOI’s decision to convert VI’s interest obligation (of the moratorium period) was based on the PIB release dated 25th Sept 2021. This initiative was taken by GOI in order to reduce the stress in the telecom sector so that its competitiveness can be preserved. The purpose of this note is to estimate the remaining debt obligation that VI has to encounter after the expiry of the moratorium period (25th Sept 2025).
VI’s Outstanding Debt
VI’s debt can be categorized into two compartments — a) The debt that it owes to GOI (AGR + auction deferred); b) And to the Commercial Banks. The latter is minuscule compared to the former. As per VI’s F22 annual report, the principal outstanding on the GOI debt stands at Rs 1.91 Lakh Cr. The details are available in my earlier note — The Collateral Damage of VI going out of business.
