India operator Vodafone Idea moved to issue shares valued at INR24.6 billion ($294.2 million) to Nokia and Ericsson to settle outstanding payments, giving the vendors 1.5 and 0.9 per cent equity stakes, respectively.

In a stock market filing, the debt-laden operator said its board approved a preferred allocation of 1.66 billion shares, with Nokia to receive nearly 1.03 billion shares potentially worth up to INR15.2 billion and Ericsson 633.7 million valued at INR9.4 billion.

The operator said the allotment will enable it to clear part of the vendors’ outstanding dues and fund its 5G rollout and 4G expansion.

Vodafone Idea CEO Akshaya Moondra noted the agreement with Nokia and Ericsson “reaffirms the vendors as long-term partners” and sets the stage for the next phase of its growth.

The issue price is about a 35 per cent premium to that of its follow-on offer in April which raised INR180 billion. The allotment, requiring approval by shareholders at an EGM on 10 July, has a six-month lock-in period.

After the shares are issued, Aditya Birla Group and Vodafone will have a combined 37.3 per cent holding, the government of India will own 23.2 per cent, with the balance of 37.1 per cent in public shareholding.

In April, Vodafone Idea vowed to take 5G service to 40 per cent of its revenue base in 24 to 30 months, following fundraising moves.

According to GSMA Intelligence the operator is India’s third largest with 205 million connections, behind Reliance Jio (482 million) and Bharti Airtel (349 million).