A government official told CNBC-TV18 that the central government is set to become the largest shareholder of Vodafone Idea Limited (Vi) soon. To save the financially stressed telecom giant, the government will hold around 33 per cent stake in the company after converting the accrued interest liability (on deferred dues) into equity. As per Section 62(4) of the Companies Act, 2013, the government will convert the interest liability of Rs 16,133 crore of the telecom company into equity. The move will help the debt-ridden telecom giant reach its fund-raising target.
The government will hold the stake in the company as a public ownership instead of a promoter. The official told CNBC-TV18 that after the conversion of equity, it will not have any presence on the telecom operator’s board.
After the conversion of equity, the central government will hold around 33 per cent stake in the company, while the promoters of the telco – United Kingdom’s Vodafone Plc and India’s Aditya Birla Group (ABG) will collectively hold 50 per cent stake in the company. The official said the Securities and Exchange Board of India (Sebi) is yet to give its final approval.
Earlier in January, Vodafone Idea CEO Ravinder Takkar had said that the company had opted to convert government dues into equity as part of the telecom reforms package. However, the government’s stake will be less than 35.8 per cent, the company said earlier. Vodafone Group Plc and Aditya Birla Group infused Rs 4,500 crore as equity in March, raising their combined stake to 74.9 per cent from 72.05 per cent.
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