Troubled Indian mobile operator Vodafone Idea said on Friday the government had ordered the company to convert into equity all fees owed to the government for use of the airwaves, including interest related to spectrum payments.
The total amount to be converted into shares is Rs. 16,133 crore, the mobile operator said.
The company said it was ordered to issue 16.13 billion shares at 10 rupees each. Shares with a par value of Rs. 10 each will be issued to the government at the same price.
The conversion of Vodafone idea Equity fees have been approved by India’s capital markets regulator, Reuters reported in October last year.
“The Ministry of Communications … issued an order today, i.e. 3 February 2023 directing the company to convert the present value of interest related to the deferral of spectrum auction rates and AGR fees into shares issued to the Government of India are to be,” the filing said.
The relief for the company comes as part of the reform package announced by the government in September 2021.
Earlier, VIL said that with the conversion of the contributions into equity, the government will get around 35 percent of the shares in the company.
Shares of VIL closed at Rs. 6.89 a share on the BSE on Friday, up 1.03 percent from the previous close. Submissions were made after the market closed.
In 2021, the Indian government approved a bailout for over-indebted people telecom Companies that allow them to convert interest on deferred adjusted gross receipts owed to the government into equity.
India’s telecoms sector has been rocked by the entry of billionaire Mukesh Ambani trust jio that pushed some competitors out of the market. The sector’s problems had also been exacerbated by heavy government taxes.
The country’s top court in 2020 gave telecom companies 10 years until 2031 to settle the charges.
