In a significant move, debt-ridden telecom operator Vodafone Idea on Tuesday (February 7) announced that its board has approved the allotment of equity shares worth ₹16,133 crore to the government, which post-allocation holds a 33.44 per cent stake in the company.
The government has become the largest shareholder in the financially-stressed telecom joint venture between UK’s Vodafone and Kumar Mangalam Birla-owned Aditya Birla Group.
The shares have been allocated to the government in lieu of conversion of interest dues, arising from deferment of adjusted gross revenue and spectrum auction payments, the company said in a regulatory filing.
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“…it is hereby informed that the board of directors of the company has, at its meeting held today approved the allotment of 16,133,198,899 equity shares of face value of ₹10 each, at an issue price of ₹10 per equity share, aggregating to ₹161,331,848,990 to the Department of Investment and Public Asset Management, Government of India,” said the filing.
The government gave the nod for the conversion of ₹16,133 crore interest dues of debt-ridden Vodafone Idea into equity, after receiving a firm commitment from the Aditya Birla Group to run the company and bring necessary investment. The equity conversion plan comes more than a year after the government made the initial decision, and serves as a breather for Vodafone Idea with a debt burden of ₹2.2 trillion as of September 2022.
“Post the aforesaid allotment, the shareholding of the government of India in the company stands at 33.44 per cent in the expanded paid-up capital base of the company,” the filing said. The paid-up share capital of the company stands increased to ₹482,520,327,840 comprising of 48,252,032,784 equity shares of the face and paid-up value of ₹10 each.