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Debt-ridden telecom company Vodafone Idea's board on Friday approved issuance of convertible debentures up to Rs 1,600 crore, convertible into equity shares at a conversion price of Rs 10 per equity share, to ATC Telecom Infrastructure.

Vodafone Idea owes an estimated Rs 6,800 crore to mobile tower giant Indus Towers and Rs 2,400 crore to ATC.

There was however no word on clearing Indus Towers' dues in the meeting.

Indus Towers is said to have asked Vodafone Idea to clear its outstanding dues and pay every month on time for continuity of business post-November 2022.

Friday's meeting was held to finalise plans for raising funds.

The company informed the Bombay Stock Exchange after the meeting through a statement that its board "approved issuance of up to 16,000 Indian Rupee denominated optionally convertible, unsecured, unrated and unlisted debentures having a face value of Rs 10,00,000 each, in one or more tranches, aggregating upto Rs 1,600 crores, convertible into equity shares at a conversion price of Rs 10 per equity share, to ATC Telecom Infrastructure Private Ltd ('ATC'), a non-promoter of the Company, on a preferential basis in accordance with Chapter V of the SEBI (Issue of Capital and Disclosure Requirements) Regulations, 2018 ('ICDR Regulations')".

Vodafone Idea further said that "the funds so raised shall be used to pay ATC amounts owed to ATC by the company under the master lease agreements and, to the extent of any remainder, for general corporate purposes of the Company".

The preferential issue would be subject to certain conditions precedent, including inter alia, the approval of the shareholders of the company and the Government having converted the interest from deferment of Adjusted Gross Revenue and spectrum dues owed by the company, the statement said.

Vodafone Idea also informed the bourses that its board "also approved convening of an Extraordinary General Meeting of the company on November 21, 2022, to seek approval of shareholders for the aforesaid preferential issue".