Product reviews, deals and the latest tech news

India instructs Vodafone Idea to exchange government obligations for $2 billion in stock

The government of India has mandated that Vodafone Idea convert all of its interest payments due to the government into equity.

According to Vodafone, it must convert $1.96 billion in debt into stock. In a regulatory filing, Vodafone Idea said (PDF) that the business “would take all required procedures promptly to conduct the aforementioned issue.”

This is the latest effort to preserve Vodafone Idea, a partnership between the British telecom giant Vodafone Group and the Indian conglomerate of billionaire Kumar Mangalam Birla, which owes the Indian government almost $2 billion for spectrum and other dues.

The Indian government authorised a bailout plan for financially troubled telecom companies in 2021, with the provision that interest payments be converted into equity at a later date.

In2016, the Indian government was granted a 36% interest in Vodafone Idea after the company’s board approved the deal. Following further investigation, the business revealed that the Indian government had no plans to take over the company.

They want three private participants in the market, and they want promoters to manage this firm, a corporate official remarked at the time.

If you’re looking for a massive wireless market, look no further than India. Reliance Jio, owned by Mukesh Ambani, and Bharti Airtel, owned by Sunil Mittal, control the vast majority of the Indian market.

When it came to the government’s auction of 5G spectrum last year, Vodafone Idea spent the least of the top three companies. To acquire the available spectrum, Jio paid over $11 billion, with Airtel spending over $5.4 billion. There was a $2.37 billion purchase of spectrum by Vodafone Idea.