Financially-stressed telecom company Vodafone Idea said on Friday that the government has directed it to convert a portion of its dues worth Rs 16,000 crore it owes to the exchequer into equity in the government’s favour.
“It is hereby informed that the Ministry of Communications has [directed] 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,” the company said in a filing.
The government will take 33 per cent equity in Vodafone Idea after converting all interest related to payments for spectrum and other dues into equity.
This will make the government the largest shareholder in the telecom company.
Vodafone Idea will convert dues of Rs 16,133 crore into equity and issue shares for Rs 10 each, the company informed.
“We had sought a firm commitment that the Aditya Birla Group would run the company and bring necessary investments. The Birlas have agreed and hence we have agreed to convert. We want India to be a three-player market plus BSNL and ensure healthy competition for consumers,” Telecom Minister Ashwini Vaishnaw said in a statement.