Indian operator Vodafone Idea received instruction from authorities to proceed with a long awaited conversion of cash owed to the government into an equity stake in the company.

In a stock market statement, Vodafone Idea announced it had been notified to convert the value of interest related to spectrum auction instalments and AGR dues into newly-issued shares in the company.

The total value to be converted comes out at INR161.3 billion ($1.9 billion).

Vodafone Idea added the plan, which received backing from its board more than a year ago, will be undertaken “forthwith”.

The offer to convert debt into a stake in the business was made by authorities as somewhat of a rescue package to debt-laden operators. In the wake of the plan being approved by company’s chiefs its then CEO Ravinder Takkar, who is now chairman, sought to quell concerns the move would lead to state control.

Despite the lead time, execution of the move has been a long time coming.

On Vodafone Idea’s fiscal Q2 2023 earnings call in November 2022, CEO Akshaya Moondra conceded he did “not know exactly the reason why this is not happening” adding the “government is taking some time”.

“From our point of view, we had exercised this option to convert in January” 2022, the executive noted. He indicated there were later talks with the Department of Telecommunications (DoT), which wrote to Vodafone Idea in March 2022 “and then we had confirmed the amount of conversion which was agreed between DoT and us in the month of April”.

The executive noted there had been no further communication from the DoT after April 2022, though added Vodafone Idea continued to engage with the government.

Based on figures released by the company in 2022, the government would receive a stake of above 35 per cent, with existing backers’ shares being diluted.