The auction of 5G spectrum in India will take place on July 26. Ahead of the spectrum auction, the Indian government will convert its debt in Vodafone Idea into equity to help the struggling telecom company strengthen its infrastructure and participate in the spectrum auction. Country.
according to a report good According to Financial Express, the government is planning to convert Rs 16,133 debt into equity, which the telecom operator owes. After converting the debt into equity, the government will hold a 32 per cent stake in Vodafone Idea, known as Vi. On the other hand, the stake of the promoters of the company, which includes Vodafone Group Plc of UK and Aditya Birla Group of India, will be reduced to 50 per cent from the current 75 per cent.
Further, the report said that the government’s decision to convert the company’s debt into equity would be completed in two to three weeks’ time and as a part of this decision VI would issue shares to the government on a preferential basis, Which will be organized by the Department of Investment and Public Asset Management (DIPAM).
The equity conversion is seen as a significant step to help the telecom operator participate in the upcoming 5G spectrum auction. So far, Vodafone Group and Aditya Birla Group have invested a total of Rs 4,500 crore in the telecom operator. Now, the company needs to raise an additional Rs 20,000 crore, which the company is hoping to raise from investors and lenders.
It is worth noting that once the equity conversion is completed, the government will become one of the major shareholders of the company. However, the report said that it has already informed the telecom operator that it will treat its share in the company as ‘public shareholding’ and not that of the promoter. This means that unlike Vodafone Group and Aditya Birla Group, which are both promoters of the company, the government will neither participate in the management nor will the company have board representation.
Separately, the company is also planning to raise funds up to Rs 500 crore by issuing equity shares or convertible warrants. ANI, citing regulatory filings in stock exchanges, wrote that the window to buy shares of the company will remain closed till the board meeting on June 24, 2022 and will re-open on June 25, 2022.
After Indian government to convert debt into equity in Vodafone Idea ahead of 5G auction: Report first appeared on BGR India.