Telecom operator Vodafone Idea on Tuesday said that the government will own around 35.8 per cent of the country’s third-largest wireless phone operator after its board approved the conversion of dues into equity. Voda Idea’s board approved the conversion of the full amount of interest related to spectrum auction instalments and dues owed to the government for use of the airwaves into equity.
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After the conversion of dues into equity, the government will become the largest shareholder of Voda Idea.
Promoter shareholders Vodafone Group would hold around 28.5 per cent and Aditya Birla Group around 17.8 per cent.
According to the company’s estimates, the value of the interest is expected to be about Rs 16,000 crore ($2.16 billion).
Vodafone Idea is a combination of the India unit of Britain’s Vodafone Group and Idea Cellular.
It has paid the government Rs 7,854 crore in dues but still owes roughly Rs 50,000 crore.
Shares of Vodafone Idea slumped nearly 19 per cent after the telecom operator approved the conversion of spectrum interest and government dues into equity.
The stock plunged to a day low of Rs 12.05 on BSE.
India’s telecom sector was disrupted by the entry of billionaire Mukesh Ambani’s Reliance Jio and forced some rivals out of the market.
The sector’s troubles have also been compounded by the massive dues owed to the Centre.
Before this, Bharti Airtel had decided not to convert the interest on deferred spectrum-related payments and government dues into equity.