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the government It has approved the conversion of debt-ridden Vodafone Idea’s interest dues of over Rs 16,133 crore into equity. The company gave this information to the stock market on Friday. Equity shares of face value of Rs 10 each will be issued to the government at this price. Vodafone Idea Limited (VIL) told the stock market, the Ministry of Communications passed an order today i.e. on February 3, 2023. Directed the company to convert interest and adjusted gross revenue (AGR) dues relating to deferment of spectrum auction installments into equity shares, which would be issued to the Government of India.
Decision after consent of Aditya Birla Group
The company got this relief under the reform package announced by the government in September 2021. The total amount to be converted into equity shares is Rs 1,61,33,18,48,990, the company said. The company has been directed to issue 16,13,31,84,899 equity shares of face value of Rs 10 each. Their issue price is also Rs 10. Telecom Minister Ashwini Vaishnav said the government’s decision to convert Vodafone Idea’s dues into equity has been taken after getting a firm commitment from the Aditya Birla Group to run the company and bring in the necessary investment. Vaishnav said in the statement, we had sought a firm commitment that the Aditya Birla Group would run this company and also bring in the necessary investment for it.
The government will get around 35 per cent stake in the company.
Birla Group has agreed to this and thus we have agreed to convert the outstanding liability into equity. Along with this, he said that the government wants the presence of three companies other than BSNL in the Indian telecom market so that consumers can get their healthy competition. VIL had earlier said that the conversion of dues into equity would give the government about 35 per cent stake in the company. The company formed after the merger of Vodafone and Idea into a single entity was the country’s largest telecom operator. It had 430 million mobile subscribers in 2018 with 35 per cent market share. However, today it has reached the third position by drowning in debt.
The company has 24.3 crore mobile customers
According to the latest data from telecom regulator TRAI, the company has 243 million mobile customers and has a market share of 21.33 per cent. VIL is yet to place purchase orders for equipment for 5G services and is struggling to clear dues to its vendors.
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