Vodafone Idea announced that its Board of Directors have approved the conversion of their debt into equity. Voda Idea’s board has approved the conversion of the full amount of interest related to spectrum auction instalments and dues owed to the government for the use of airwaves into equity.
This has made the government the largest shareholder of Voda Idea. This conversion will result in dilution for all the existing shareholders, including the founders. Vodafone Group PLC will own around 28.5% and Aditya Birla Group will have 17.8%. After the conversion, the government shall hold 35.8% in the company.
The announcement came early today after which the shares witnessed a gap down opening and fell over 14%.
“…it is expected that the Government will hold around 35.8% of the total outstanding shares of the Company, and that the Promoter shareholders would hold around 28.5% (Vodafone Group) and around 17.8% (Aditya Birla Group), respectively,” said the company in a regulatory exchange on Tuesday morning.
According to the company’s estimates, the value of the interest is estimated to be near Rs 16,000 crores.