Government on Friday agreed to convert Vodafone Idea’s interest dues into equity, said the telecom firm in a stock exchange filing. Vodafone Idea on Friday said that government directed it to issue shares worth Rs 16,133.1 crore at an issue price of Rs 10 per share.
Last year, the telecom department had computed the net present value (NPV) on the interest on spectrum and adjusted gross revenue (AGR) on deferred statutory dues at Rs 16,133.1 crore.
Earlier, VIL had said that with conversion of dues into equity, the government will get around 35% stake in the company.
“It is hereby informed that 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 instalments and AGR Dues into equity shares to be issued to the Government of India,” said Vodafone Idea in a stock exchange filing on Friday.
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 relief for the company comes as part of the reforms package announced by the government in September 2021.
Shares of VIL closed at Rs 6.89 apiece on Friday at the BSE, up by 1.03 per cent compared to previous close.
In October 2022, market regulator Sebi approved the conversion of Vodafone Idea dues into equity.
In 2021, Centre 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 Mukesh Ambani’s Reliance Jio and the sector’s troubles had also been compounded by large dues owed to the government.
In 2020, Supreme Court gave telecom firms 10 years until 2031 to clear the dues.