Birla Tells Govt He Is Willing To Give Up Stake In Vodafone Idea

Vodafone Idea losses could potentially swamp the group finances making Birla wary of making additional investments in the company, analysts say.

Industrialist Kumar Mangalam Birla has expressed willingness to offer his group’s 27 per cent stake in Vodafone Idea Limited (VIL) to any government or domestic financial entity in order to keep the stressed telecom company alive.

The Aditya Birla Group chairman and promoter of VIL made the suggestion in a letter to Union Cabinet Secretary Rajiv Gauba on June 7.

According to official data, VIL had an adjusted gross revenue (AGR) liability of Rs 58,254 crore out of which the company has paid Rs 7,854.37 crore and Rs 50,399.63 crore is outstanding.

Birla made the suggestion to give up the control of his company more than a month before the Supreme Court dismissed the company’s application for recalculation of the AGR dues, which highlighted that there is a need for urgent measures from the government.

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In his letter Birla said, “It is with a sense of duty towards 27 crore (270 million) Indians connected by VIL, I am more than willing to hand over my stake in the company to any entity-public sector/government/domestic financial entity or any other that the government may consider worthy of keeping the company as a going concern.”

Last September, the VIL board had announced a plan to raise Rs 25,000 crore but investors have not been forthcoming due to the absence of support from the government.

Without immediate active support from the government on the three issues by July, the financial situation of VIL will come to an “irretrievable point of collapse,” Birla said in the letter dated June 7.

There were no immediate comments from either Aditya Birla group or VIL on the issue.

Further, it could not be ascertained whether there were any other communications between Birla and the government after the June 7 letter.