New Delhi: The government will take 33 percent equity in the financially-stressed telecom company Vodafone Idea after converting all interest related to payments for spectrum and other dues into equity.
Vodafone Idea had said on Friday that the government has directed it to convert a portion of its dues worth Rs 16,000 crore it owes to the exchequer into equity in the government's favour.
"It is hereby informed that the Ministry of Communications has [directed] the company to convert the NPV of the interest related to deferment of spectrum auction installments and AGR dues into equity shares to be issued to the government of India," the company said in a filing.
This will make the government the largest shareholder in the telecom company.
"We had sought a firm commitment that the Aditya Birla Group would run the company and bring necessary investments. The Birlas have agreed and hence we have agreed to convert. We want India to be a three-player market plus BSNL and ensure healthy competition for consumers," Telecom Minister Ashwini Vaishnaw said in a statement.
Vodafone Idea is a combination of the India unit of Britain's Vodafone Group and Idea Cellular.
India's telecom sector was disrupted by the entry of billionaire Mukesh Ambani's Reliance Jio, which forced some rivals out of the market. Massive dues owed to the government compounded the telecom sector's troubles.