Vodafone Idea Says India Doesn’t Want to Run Telco Post Bailout

Vodafone Idea Ltd. said that India’s government doesn’t want to actively run the unprofitable phone operator after its board approved a rescue plan that made the state its biggest shareholder with a 36% stake in the company, Bloomberg News reported. “They do not have to desire to take over the operations of the company,” Ravinder Takkar, managing director and chief executive officer of Vodafone Idea, told reporters on Wednesday. “They want three private players in the market, they want promoters to run this company,” he said, referring to a widely used term in India for founding and controlling shareholders. Takkar’s comments sought to reassure investors and Vodafone Idea’s shares rose 11% in Mumbai trading on Wednesday after the bailout news prompted a 21% drop the previous day. The restructuring will not only result in dilution for all existing shareholders of the company including the founders, but also removes the need for any immediate cash outgo from the beleaguered wireless operator, a joint venture between the U.K.’s Vodafone Group and Indian billionaire Kumar Mangalam Birla’s conglomerate. Both will now become significant minority shareholders in the firm. Read more.