UK-India trade body writes to envoy on Vi equity conversion delay

The UK India Business Council has asked the Indian High Commissioner to help speed up the conversion of Vodafone Idea’s accumulated interest on the deferred adjusted gross revenue (AGR) dues into equity, the ‘Economic Times’ reported.

Vikram K Doraiswami, the high commissioner, has sought guidance from India’s finance ministry about the council’s letter that said that the issue may gather momentum in the upcoming months.

The council said that there has been a delay in conversion by India’s Department of Telecommunications (DoT) despite a written clearance from the finance ministry and support from the Prime Minister’s Office.

The trade group wrote that the delay has hindered the cash-strapped telco from raising funds. It warned of “negative implications” on India’s investment climate if the issue is not resolved as directed by the Cabinet.

It claimed that DoT decision-makers are verbally communicating to Vodafone and its promoters that they require pre-conditions for equity conversions—a condition not included in the Indian cabinet’s decision, according to the newspaper.

The same report quoted a senior civil servant to say that the troubled telco’s promoters—Vodafone Plc of UK and India’s Aditya Birla Group—were unwilling to infuse more capital and that had made it unviable for the government to facilitate the conversion of interest into equity.

Diageo, HSBC, Standard Chartered, Vodafone Group, Barclays, GlaxoSmithKline, PwC, Rolls-Royce, State Bank of India, ICICI Bank are among the members of the UK India Business Council.