In a relief for debt-ridden Vodafone Idea, the government has approved conversion of over Rs 16,133 crore interest dues of the telecom company into equity. This was disclosed by the company in a regulatory filing on Friday, PTI reported.
Equity shares of face value of Rs 10 each will be issued to the government at the same price.
“Ministry of Communications…passed an order today ie 3 February, 2023…directing the Company to convert the NPV of the interest related to deferment of spectrum auction instalments and AGR Dues into equity shares to be issued to the Government of India,” Vodafone Idea said in the regulatory filing.
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The conversion of interest dues into equity comes as part of the reforms package announced by the government in September 2021.
“The total amount to be converted into equity shares is Rs 16133,18,48,990. The Company has been directed to issue 1613,31,84,899 equity shares of the face value of Rs 10 each at an issue price of Rs 10 each,” the filing said.
Earlier, VIL had said the government would get around 35 per cent stake in the company following the conversion of dues into equity.
Shares of VIL closed at Rs 6.89 apiece on Friday at the BSE, up by 1.03 per cent compared to previous close. The filing came after market hours.
Vodafone Idea is a combination of the India unit of Britain’s Vodafone Group and Idea Cellular.
Last year in January, Vodafone Idea’s board had approved the conversion of dues owed to the government into equity.
The equity conversion issue was due for over a year, delaying the telecom company’s plan of raising funds from external investors that it desperately needs to clear dues of vendors such as Indus Towers and expand its existing 4G network, a report in The Economic Times said.
VI also needs to urgently finalise 5G equipment supply deals with the likes of Ericsson and Nokia for rolling out next generation networks and stem rapid subscriber losses.