Tata Teleservices withdraws option of conversion of interest into equity
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Tata Teleservices has decided to withdraw the desire expressed for conversion of interest into equity and informed the DoT that the company is not desirous of this option.
As the interest amount eligible for conversion is much lesser than as expected and calculated by the company, the Board of Directors of the Company, in its meeting held on February 1, has decided to withdraw the desire.
The DoT, in response, has informed the Company that the NPV of the interest which is eligible for conversion into equity is only Rs 195.22 crore as against the company's calculation of Rs 850 crore.
The Net Present Value (NPV) of this interest is expected to be approx Rs 850 crore as per the company's best estimates, subject to confirmation by the DoT. The average price of the company's shares at the relevant date of August 14, 2021 as per the calculation method provided in the DoT communication works out to be Rs. 41.50 per share, subject to final confirmation by the DoT, the company had said earlier while accepting the conversion option.
In case of conversion, it will result in dilution of all the existing shareholders of the company, including the promoters. Following conversion, it is expected that the Government will hold approx 9.5 per cent of the total outstanding shares of the company, it had said.
