SEBI has approved the government's proposal to come in as a financial investor and to convert dues of over $1.92 billion by telecom operator Vodafone Idea to equity; a report claimed quoting senior government officials. 

The central government last year had approved a rescue package for debt-strapped telecom companies that allowed them to convert interest on deferred adjusted gross revenue owed to the government into equity. Analysts saw this package as a bailout for Vodafone Idea, which was on the verge of bankruptcy.

However, the Centre would like to see Vodafone Idea present a clear fund-raising plan before it converts the cash-strapped telco’s accrued interest on deferred adjusted gross revenue (AGR)-related dues into equity. If the promoters (Aditya Birla Group and Vodafone Plc) are not willing to put in more money into the company, they should dilute their stake and bring in a new investor. Just depending on government support won’t do any good to the company. The government's stake in Vodafone after the conversion could be more than 30%, the official added, which would make it one of the largest shareholders in the company along with UK's Vodafone Group and Aditya Birla Group.

Click the icon for more detailed information