To ring-fence Rs 25K crore Vi exposure, banks look to convert debt into equity

Worried over the worsening financial profile of telecom firm Vi, formerly known as Vodafone Idea, lenders, led by State Bank of India, are taking a close look at the firm and considering various options, including conversion of debt into equity to safeguard their exposure.

The company, which has piled up a debt of close to Rs 1.50 lakh crore, has already breached specified covenants involving over Rs 15,500 crore, thus affecting its ability to generate cash flows. “We have to see whether conversion of debt into equity is a good idea. Banks will have to safeguard their interest,” said a banking source.