New Delhi: After the company’s stock price stabilises at Rs 10 or higher, the government would buy a stake in the heavily indebted Vodafone Idea, an official source said.

The board of Vodafone Idea (VIL) has offered the government a stake at par, or Rs. 10 per share.

“There is a SEBI norm that the acquisition should take place at par value. DoT will clear the acquisition after VIL shares stabilise at Rs 10 or above,” an official source told PTI.

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Since April 19, VIL shares have been trading below Rs 10. On Thursday, the stock fell 1.02 percent to close at Rs. 9.68 on the BSE.

The request to purchase a share in VIL had been approved by the finance ministry in July.

The heavily indebted Vodafone Idea (VIL) has chosen to convert approximately Rs 16,000 crore of interest liabilities to the government into equity, which will equal to about 33 percent of the firm while founders’ share will decrease from 74.99 percent to 50 percent.

The government has provided telecom operators the choice of paying the interest for the deferred spectrum payments and AGR (adjusted gross revenue) obligations over a four-year period by converting the NPV of such interest amount into equity.

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As of September 30, 2021, the total gross debt of the company—excluding lease obligations and including accrued but unpaid interest—was Rs. 1,94,780 crore.

The sum consists of Rs 1,08,610 crore in postponed spectrum payment commitments, Rs 63,400 crore in government-owed AGR liabilities, and Rs 22,770 crore in debt owed to banks and other financial institutions as of January 11, 2022, the date it offered to convert interest liability into equity.

At the end of the April–June 2022 quarter, VIL had total gross debt of Rs 1,99,080 crore (excluding lease liabilities and including interest accrued but not due), which included deferred spectrum payment obligations of Rs 1,16,600 crore, AGR liabilities of Rs 67,270 crore that are owed to the government, and debt from banks and financial institutions of Rs 15,200 crore.

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