India orders Vodafone Idea to convert government dues into $2 billion equity • TechCrunch

The Indian government has ordered the telecom operator Vodafone Idea to convert all the interest the firm owes to the government into equity in the firm.

Vodafone said it has been ordered to convert capital worth $1.96 billion into equity. The company “will take all necessary actions forthwith to undertake the aforesaid issuance,” Vodafone Idea disclosed (PDF) in a regulatory filing.

The move is the latest in the rescue attempts to save Vodafone Idea, a joint venture between the British telecom giant the Vodafone Group and billionaire Kumar Mangalam Birla’s conglomerate, which owned the Indian government about $2 billion for spectrum and other dues.

Last year, Vodafone Idea’s board approved a plan to give the Indian government a 36% stake in the company. But the company reported later that the Indian government had no desire to take over the operations of the firm.

“They want three private players in the market, they want promoters to run this company,” a company executive said at the time.

India is the world’s second largest wireless market. Mukesh Ambani’s Reliance Jio and Sunil Mittal’s Bharti Airtel command the market in the country.

(More to follow.)