Govt option? Part telco interest dues as equity

NEW DELHI: The government has discussed the option of converting a part of the interest dues of mobile companies into equity instruments as part of a larger solution to sort out the telecom financial mess, which is likely to be taken up by the Union Cabinet very soon in view of Vodafone Idea’s stressed finances.

The proposal being discussed includes extending the moratorium on spectrum payments for companies by a few years, and thereafter convert the interest portion — to be charged to maintain the net present value (NPV) of the outstanding — into equity, while the companies are be mandated to pay back the principal in its entirety, sources said.