Government may convert part of Vodafone Idea's dues into stake

The government has clarified that it will not infuse any cash into the company

The Centre is mulling picking up a stake in debt-laden Vodafone Idea not through a fresh capital infusion, but by converting part of the company's dues, according to a report by The Economic Times.

The report suggests that the government is open to converting more dues into equity in four years, subject to conditions.

Aslo read: Policy support, fundraise may give VIL relief but sizable tariff hike must: Edelweiss

"A decision could be taken by September 15. However, there is no certainty," sources are quoted as saying by ET, reasserting that there will be no infusion of funds from the government.

"Government is not interested in running the company's operations. The idea is to simply help the telecom industry remain a three-player market," the source added.

The total gross debt (excluding lease liabilities and including interest accrued but not due) as of June 30, 2021 of VIL stood at Rs 1,91,590 crore, comprising deferred spectrum payment obligations of Rs 1,06,010 crore and AGR liability of Rs 62,180 crore that the government is due.

Vodafone Group has a 44.39 per cent stake in Vi, the rest is with the public. Vodafone Idea closed at Rs 8.75 on September 14.

The Union Cabinet on Wednesday approved a relief package for the telecom sector that includes a four-year moratorium on payment of statutory dues by telecom companies as well as allowing 100 per cent foreign investment through the automatic route.

Check out latest DH videos here: