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Vodafone Idea, on Tuesday, issued 16,130 million equity shares to the central government, giving it a 33.4 per cent stake in the company.
With this government also becomes the largest shareholder of the telecom company. The operational and management control of the company will remain with existing promoters.
The issue of shares comes within days of government order directing Vi to issue 33.4 per cent stake, and is in line with the telecom reforms package of September 2021. While the Vi board had approved conversion of interest worth Rs 16,133 crore on deferred liabilities into equity stake for government, the proposal was pending for several months.
On Tuesday, the board of Vi approved the 16130 million shares at a face value of Rs 10 to Department of Investment and Public Asset Management of central government.
The share issue is a lifeline for the stressed telecom company which has been finding difficult to raise funds, invest in network expansion and pay vendors.
While the government becomes the largest single shareholder, its stake will reduce to 32.09 after issue of shares to ATC Telecom Infrastructure Ltd. The promoter holding in the firm will reduce from the existing 74.99 per cent to 50.36 per cent and further fall to 48.76 per cent after stake issue to ATC.
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