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Vi will become government telecom company when share prices stabilize at Rs 10 or more.

The Indian government is about to buy Vodafone Idea (Vi), the third largest telecom company in the country. A report from PTI says that when the company’s stock price stabilizes at Rs 10 or above. The Indian government will own 33 percent of it, making it its largest shareholder. The move will lower the promoters’ equity from its current level of 74.99 percent to 50%. For those who don’t know, the Finance Ministry has already given the go-ahead to buy into VIL (Vodafone Idea Limited). SEBI (Securities and Exchange Board of India), in charge of the market, says that the purchase cannot happen below par value. Follow hitsbuddy for latest news.

This happened because Vi was unable to raise money and pay its debts. The company has a total gross debt of Rs 1,99,088 crore. It not counting lease liabilities and interest that earned but is not yet due. This amount includes Rs 1,16,600 crore in deferred spectrum payment obligations, Rs 67,720 crore in AGR liabilities due to the government, and Rs 15,200 crore in debt from banks and other financial institutions. Vi will become government telecom company when share prices stabilize at Rs 10 or more.

At the beginning of the year, the telco with a lot of debt decided to turn Rs 16,000 crore in interest payments to the government into 33 percent of the company. Vi offered the government a piece of his business for Rs 10 per share. But since April 19, the shares have not been worth more than Rs 10. This makes it impossible for the government to take over Vi.

Vi has been trying to raise money, exactly Rs 25,000 crore, for more than two years. But as of March 2022, it had only gotten Rs 4,500 crore from its promoter entities, and Rs 20,000 crore was still left over.

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