TTML decides against conversion of interest amount on AGR fees into equity

Tata Teleservices (Maharashtra) Ltd said on Tuesday that it has decided not to opt for conversion of interest related to AGR fees in equity, as the amount of interest eligible for such conversion turned out to be much less than the own calculations of the company.

TTML had initially decided to go for converting interest rates on AGR fees 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 but Rs 195.22 crore is contrary to the company’s calculation of Rs 850 crore, said Tata Teleservices (Maharashtra) in a regulatory filing.

“Because the amount of interest that is eligible for conversion is much less than expected and calculated by the company, the Board of Directors … at its meeting held on February 1, 2022, decided the wish expressed for to convert, “the submission said.

The company added that it “is not desirable to opt for conversion of equity into equity”.

Last month, Tata Teleservices (Maharashtra) said it will opt to convert the interest rate on AGR fees into equity and after conversion, the government in the company is expected to be around 9.5 percent.

The telecom sector had a shot in the arm last year with the government approving a blockbuster aid package that included a four-year suspension for companies from paying legal fees, permission to share tight airwaves, change in the definition of income on which levies have been paid and 100 per cent foreign investment via the automatic route.

The government had also given telcoes the option to convert the interest amount relating to the moratorium period into equity.

(Only the headline and image of this report may have been re-edited by Business Standard staff; the rest of the content will be automatically generated from a syndicated feed.)

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