Vodafone’s spectrum auction dues worth Rs 36,950 crore will be converted into equity by the government, which will increase its holding in Vodafone Idea to 48.99 per cent – up from 22.6 per cent. The government has been the single-largest shareholder in the debt-ridden Vodafone Idea.

Now it will receive 3,695 shares at issue price of Rs 10 a share, the company said in a regulatory filing on Sunday. The shares to be issued within 30 days of the order. The move is in line with the relief package announced for the telecom sector in September 2021.

The outstanding spectrum dues include deferred dues repayable after expiry of the moratorium period.

The promoters will continue having operational control.

“The Ministry of Communications… in line with the September 2021 Reforms and Support Package for Telecom Sector has decided to convert the outstanding spectrum auction dues, including deferred dues repayable after expiry of the moratorium period, into equity shares to be issued to the Government of India. The total amount to be converted into equity shares is Rs 36,950 crore,” the filing read.

“Post the aforesaid issuance of equity shares, the Government of India shareholding in the Company will increase from existing 22.60 per cent to approximately 48.99 per cent. The promoters will continue to have operational control of the company,” the filing read.

Earlier, Vodafone Idea CEO Akshaya Moondra had written to the telecom department asking for approval of equity conversion for the spectrum auction dues and Adjusted Gross Revenue from 2012 to 2016, reported Economic Times. The report said the letter outlines Vodafone-Idea’s inability to pay  Rs 5,431 crore in cash or provide a bank guarantee for the shortfall for the 2015 spectrum auction.