New Delhi:
The government will take 33 percent of the equity in Vodafone Idea after converting all interest related to payments for spectrum and other rights into equity, making it the telecom company’s largest shareholder.
Vodafone Idea will convert dues of Rs 16,133 crore into equity and issue shares at Rs 10 each, the company said in a market filing.
Vodafone Idea is a combination of the Indian unit of the British Vodafone Group and Idea Cellular.
India’s telecom sector was disrupted by the arrival of billionaire Mukesh Ambani’s Reliance Jio, forcing some rivals to exit the market. Huge dues owed to the government exacerbated the problems of the telecom sector.
In January last year, the board of Vodafone Idea approved the conversion of contributions owed to the government into equity. The government has now released it.
Vodafone Idea shares closed at Rs 6.89 apiece on the Bombay Stock Exchange today, up 1.03 percent since the previous close. The submission came after market hours.
The government has decided to convert the interest owed by Vodafone Idea into equity after receiving a firm commitment from the Aditya Birla Group to run the company and make the necessary investments, Telecom Minister Ashwini Vaishnaw said today.
“We had been looking for a firm commitment that the Aditya Birla Group would run the company and make the necessary investments. The Birlas agreed and that is why we agreed to transform. We want India to become a three-player market plus BSNL and ensure healthy competition for consumers,” said Mr. Vaishnaw in a statement.