Debt-ridden Vodafone Idea (Vi) needs capital infusion, not just conversion of its interest dues into government equity, Union Communications Minister said on January 5, 2023. He added that discussions about how much capital needs to be infused and who will infuse this capital are ongoing, Financial Express reported. “The responsibility of capital has to come from various sources. The company just doesn’t require conversion, it requires capital. All these are complex issues,” the minister said, adding: "Our officials keep meeting executives of Vodafone Idea on a regular basis.” Why it matters: Such efforts in pushing Vi to raise additional capital suggest that the government wants the telco to show its willingness to expand before providing it with some relief. Vi has said that it needs to raise Rs 25,000 crore to deal with the immediate financial crunch. The promoters have infused Rs 4,900 crore and say that investors will infuse the remaining Rs 20,000 crore after the government converts its debt into equity, according to the Financial Express. Moreover, if the telcos fail to pay their principal amount due to the government after the end of a four-year moratorium period (provided by the government in the 2021 relief package), the government will also have the option to convert that principal amount into equity. Background: Vi is under a massive debt burden. Its total liabilities stand at around 2.2 lakh crore, which includes spectrum payment obligations worth Rs 1.3 lakh crore and Adjusted Gross Revenue (AGR) liabilities worth Rs. 0.69 lakh…
