The government decided to convert the interest dues of Vodafone Idea into equity after receiving a firm commitment from Aditya Birla Group to run the company and bring necessary investment, Telecom Minister Ashwini Vaishnaw said on Friday.
Throwing a lifeline to the troubled telco, the government has approved the conversion of over Rs 16,133 crore interest dues of Vodafone Idea into equity. With this conversion, the government is expected to hold a 33.14 per cent stake in the loss-making telecom firm, which is reeling under a debt burden of over Rs 2 lakh crore.
“We had sought a firm commitment that the Aditya Birla Group would run the company and bring necessary investments. 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,” Vaishnaw said in a statement.
Vodafone Idea will issue equity shares to the government at a face value of Rs 10 each. The relief for the company came as part of the reforms package announced by the government in September 2021.