Vi promoters earmark shares worth ₹3,529 cr to settle legacy liabilities

Mumbai: Vodafone Idea's (Vi) promoters have earmarked 3.28 billion equity shares worth ₹3,529 crore to settle legacy liabilities related to merger between Vodafone India and Idea Cellular.

This comes after Vi, on Wednesday, amended an agreement with its Vodafone promoter group to secure the recovery of nearly ₹5,836 crore linked to liabilities arising from the 2017 Vodafone-Idea merger. The revised recovery structure included ₹2,307 crore in cash, which will be paid by Vodafone promoters over the next 12 months.

The remaining amount will be secured through 3.28 billion equity shares held by three Vodafone group promoter entities-Euro Pacific Securities Ltd (EPSL), Omega Telecom Holdings Pvt Ltd and Usha Martin Telematics Ltd (UMTL), the company said on Friday.


The earmarked shares represent 3.03% of Vodafone Idea's total equity capital and will be sold over a period of five years, with the net proceeds accruing directly to Vodafone Idea, it said in a stock exchange filing.

The promoters will continue to remain the legal and beneficial owners of the shares. However, they will not be permitted to sell, transfer, dispose of or create any lien on these shares, except as provided under the amended agreement.

Of the total earmarked shares, EPSL has set aside 2.89 billion shares, accounting for over half of its holding in Vi, while Omega has earmarked 256.8 million shares and UMTL 131.8 million shares, the disclosure showed.

This is part of the contingent liability adjustment mechanism (CLAM) that was built into the original merger agreement to address any pre-merger legal, tax or regulatory liabilities that may crystallise after the merger.

The original CLAM arrangement was supposed to expire on June 30, 2025 and later got extended to Dec 31, 2025. Before it expired, Vi and Vodafone promoters have revised the settlement terms, according to which Vi now expects to receive around ₹5,836 crore.