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Govt to become biggest shareholder in Vodafone Idea; company approves conversion of spectrum interest, govt dues into equity

Following the conversion into equity, the Indian government is expected to hold about 35.8% of the total outstanding shares of Vodafone Idea. Promoter shareholders Vodafone Group would hold around 28.5% and Aditya Birla Group around 17.8%.

Govt to become biggest shareholder in Vodafone Idea; company approves conversion of spectrum interest, govt dues into equity

Bengaluru: Indian telecom operator Vodafone Idea said on Tuesday its board approved conversion of the full amount of interest related to spectrum auction instalments and dues owed to the government for use of airwaves into equity.

The "net present value" of the interest is expected to be about 160 billion Indian rupees ($2.16 billion), according to the company`s estimates.

Following the conversion into equity, the Indian government is expected to hold about 35.8% of the total outstanding shares of Vodafone Idea. Promoter shareholders Vodafone Group would hold around 28.5% and Aditya Birla Group around 17.8%.

India`s telecom sector was disrupted by the entry of billionaire Mukesh Ambani`s Reliance Jio and forced some rivals out of the market. The sector`s troubles have also been compounded by the huge dues owed to the government.

Vodafone Idea, a combination of the India unit of Britain`s Vodafone Group and Idea Cellular, has paid the government 78.54 billion rupees in government dues, but still owes roughly 500 billion rupees.

Larger rival Bharti Airtel on Friday confirmed its decision to not convert the interest on deferred spectrum related payments and government dues into equity.

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