The government has cleared the conversion of Rs 16,133 crore interest dues of debt-ridden Vodafone Idea into equity after receiving a firm commitment from Aditya Birla Group to run the company and bring necessary investment, telecom minister Ashwini Vaishnaw said on Friday.

Throwing a lifeline to the troubled telco, the government has approved the conversion of over Rs 16,133 crore interest dues of Vodafone Idea into equity.

With this conversion, the government is expected to become the biggest shareholder in the loss making telecom firm with a 33.14 per cent stake.

Vodafone Idea will issue equity shares to the government at face value of Rs 10 each.

“Ministry of Communications...passed an order today i.e. 3 February, 2023... directing the company to convert the NPV of the interest related to deferment of spectrum auction instalments and AGR dues into equity shares to be issued to the government of India,” the filing said.

The relief comes as part of the reforms package announced by the government in September 2021.

“The total amount to be converted into equity shares is Rs 16133,18,48,990. The company has been directed to issue 1613,31,84,899 equity shares of the face value of Rs 10 each at an issue price of Rs 10 each,” the filing added.

Earlier, VIL had said that with conversion of dues into equity, the government will get around 33 per cent stake in the company.

The order from the Department of Telecommunications (DoT) comes after a legal opinion advised in favour of picking a stake in VIL even after the shares are trading below Rs 10.

From being the biggest telecom operator after merger of Vodafone and Idea into single entity, with 43 crore mobile subscriber base accounting for 35 per cent market share in 2018, the debt-ridden company has slipped to be a distant third telecom operator.

The company has 24.3 crore mobile subscribers accounting for a 21.33 per cent market share. VIL is the only telecom operator which is yet to place purchase orders for 5G services equipment and has been struggling to pay the dues of its vendors.

Except for the headline, this story has not been edited by The Telegraph Online staff and has been published from a syndicated feed.