
The Union government is set to become the biggest shareholder of Vodafone Idea Limited (Vi) soon, holding around 33 percent in the company after converting the telco’s accrued interest liability on deferred dues into equity.
The government will convert Vi’s interest liability of Rs 16,133 crore into equities. Apart from the government, the telco’s promoters UK’s Vodafone Plc and India’s Aditya Birla Group will collectively hold around 50 percent in the company, with the public holding the shares remaining.
The government’s stake is part of the public ownership, and will not be in the promoter category. There will be no board seats for government nominees post this 33 percent of equity holding. Once the equity conversion is complete, the company has to raise external funding. An official said, “The Union government will dilute its equity stake in Vodafone Idea once its balance sheet improves.”
The conversion will reduce Vodafone Idea’s debt and dilute promoters’ stake, with parent Vodafone Group Plc and Aditya Birla Group expected to own around 28.5% and 17.8%, respectively. SEBI is yet to give its final nod.
In January, Vodafone Idea CEO Ravinder Takkar said that the company had opted for converting government dues into equity as part of the telecom reforms package. However, the government’s shareholding will be less than 35.8 percent. Earlier in March, Vodafone Group Plc and Aditya Birla Group, pumped in Rs 4,500 crore as equity.
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