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Vodafone Idea said on Thursday it will issue shares worth 24.58 billion rupees ($294.3 million) to two key network equipment vendors as part of the debt-laden telecom operator's bid to clear its dues.

India's smallest telecom firm by subscribers will issue preferential shares worth 15.20 billion rupees to Nokia Solutions and 9.38 billion rupees to Ericsson India, it said in a statement.

These will be issued at 14.8 rupees per share, a near 8% discount to the stock's Thursday's closing price.

Following the issue, Nokia and Ericsson will have a 1.5% and 0.9% stake in the company, respectively, it said. The companies did not hold any stake in Vodafone Idea prior to this.

The latest move by Vodafone Idea underlines company's struggle to cut down its dues to vendors, while attempting to catch up with larger rivals Bharti Airtel and Reliance Jio by launching its 5G services and bolstering its 4G network.

The company reportedly owes more than 135 billion rupees to its tower and equipment vendors. Indus Towers accounts for 100 billion of the dues, while the rest owed to Nokia, Ericsson and others.

As of March-end, Vodafone Idea's deferred payment obligations to the Indian government, its largest individual shareholder, was at 2.03 trillion rupees, while its total debt from banks and financial institutions stood at 40.4 billion rupees.

The company had in April raised about 200 billion rupees in India's largest-ever follow-on public offering, and reiterated on Thursday that it is in discussions with banks to raise up to 250 billion rupees.

"VIL is all set to participate in the industry growth with right investments to expand its 4G coverage and offer 5G experience to its customers while remaining focused on its execution capabilities," CEO Akshaya Moondra said on Thursday.

($1 = 83.5335 Indian rupees)