Government approves Vi's Rs 16,133 crore debt-to-equity conversion

According to the most recent data released by telecom regulator TRAI, the telco has 24.3 crore mobile users, accounting for a 21.33% market share.

The conversion of Vodafone Idea's outstanding interest debt of Rs 16,133 crore into equity has been given the government's approval, the company announced in a statement.

A total of Rs 16133,18,48,990 will be converted into equity shares. The telco is required to issue 1613,31,84,899 equity shares with a face value of 10 rupees each at a 10 rupee issue price. To carry out the aforementioned issuance, the telco will immediately take all necessary steps.

With this conversion, the promotions' ownership will drop to 50% from 74.99% and the government is anticipated to hold 33.14% of the cash-strapped telecom company that is struggling under a debt load of over Rs 2 lakh crore.

"Ministry of Communications...passed an order today i.e. 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," the company filing said.

"The total amount to be converted into equity shares is ₹16133,18,48,990. The company has been directed to issue 1613,31,84,899 equity shares of the face value of ₹10 each at an issue price of ₹10 each," the filing added.

Government rescue measures for debt-ridden telecom businesses were adopted in 2021, enabling them to convert interest on deferred adjusted gross revenue owed to the government into equity.

According to the most recent data released by telecom regulator TRAI, the telco has 24.3 crore mobile users, accounting for a 21.33% market share.

Vodafone Idea is the sole telecom provider that hasn't placed any orders for 5G service equipment and has had trouble paying its vendors' bills.

In response to Vodafone Idea's weak financial sheet, Indus towers made a provision for doubtful debt totaling Rs 2.298.1 crore last month.