Exclusive: FinMin completes Vi debt-to-equity conversion, govt holds 33.4% stake

The telecom operator posted a consolidated loss of Rs 6,563.1 crore in the quarter ended March 2022, down from Rs 7,230.9 crore in the previous period, as higher operating income and average revenue per user supported the company.

The Finance Ministry has completed the debt-to-equity conversion in Vodafone Idea (Vi) of its Rs 16,133 crore interest dues, and the government now holds a 33.4 percent stake, which it will look to exit once the share price is above Rs 10, sources said.

“The finance ministry has concluded its debt-to-equity conversion. The government now holds about 33 percent in Vi. The transaction now stands complete. The government does not intend to stay in it for long, and will look for an exit route once the share price is above Rs 10,” sources told Moneycontrol.

The Centre is now the largest shareholder in Vi and stepped in to save the ailing telecom operator and prevent monopoly in the sector. However, the government will not take over the management control.

The government picked up the equity at the face value of Rs 10 per share. Vi had dues of Rs 16,133 of interest charges on deferred adjusted gross revenue payments.

In early February, the government had given a go-ahead to the conversion of Vi dues into equity. The government had approved a relief package for the telecom sector in September 2021, which allowed the telcos to convert their AGR-related dues into equity.

Vi promoters now own around 50 percent combined stake in the telecom operator.

The Aditya Birla group had given a firm commitment to the government to run the company, bring in necessary investments and also roll out the 5G network.

On February 7, the Vi board of directors had approved the allotment of 16,133,184,899 equity shares to the government at the issue price of Rs 10.