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Business News/ News / India/  Govt to convert Vodafone Idea interest dues of 16,133 crore into equity

The government has approved the conversion of 16,133 crore interest dues of Vodafone Idea into equity, the company said in a statement.The relief for the company comes as part of the reforms package announced by the government in September 2021. The relief for the company comes as part of the reforms package announced by the government in September 2021.

“The Ministry of Communications, Government of India has, in line with the reforms and support package for Telecom Sector communicated earlier and the conversion option exercised by the Company as provided for therein, passed an order today i.e. 3 February 2023 under section 62(4) of the Companies Act, 2013, directing the Company to convert the NPV of the interest related to deferment of spectrum auction installments and AGR Dues into equity shares to be issued to the Government of India," the filing said.

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 Company will take all necessary actions forthwith to undertake the aforesaid issuance.

VIL has opted for converting about 16,000 crore of interest liability payable to the government into equity, around a 33 per cent stake in the company, while promoters' holding will come down to 50 per cent from 74.99 per cent.

Earlier, VIL had said that with the conversion of dues into equity, the government will get around 35 per cent stake in the company.

In 2021, the government approved a rescue package for debt-strapped telecom companies, allowing them to convert interest on deferred adjusted gross revenue owed to the government into equity.

India's telecom sector was disrupted by the entry of billionaire Mukesh Ambani's Reliance Jio that forced some rivals out of the market. The sector's troubles had also been compounded by large dues owed to the government.

The country's top court in 2020 gave telecom firms 10 years until 2031 to clear the dues

Shares of VIL closed at 6.89 apiece on Friday at the BSE, up by 1.03 per cent compared to the previous close. The filing came after market hours.

*With inputs from agencies

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Updated: 03 Feb 2023, 07:48 PM IST
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