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Debt-ridden Vodafone Ide on Friday said its board has approved an amendment in shareholders’ agreement to enable promoters Aditya Birla Group and Vodafone Group to retain governance and management rights in the company notwithstanding the increased government’s stake at 48.99 per cent.

The company will convene an extraordinary general meeting on June 3 to seek shareholder’s nod for the same, according to a regulatory filing. ”The Board of Directors at its meeting held today i.e. on 2 May 2025 have inter-alia resolved to…amend certain clauses of the Shareholders’ Agreement (to which the Company is a party) so as to modify, amongst others, the ’Qualifying Threshold’ from 13 per cent to 10 per cent and, solely for this purpose, to disregard the equity shares originally issued to the Government of India,” the filing said.

Pursuant to the government increasing stake from 22.6 to 48.99 per cent in Vodafone Idea, the shareholding of the Aditya Birla group companies and the Vodafone group companies stands at 9.5 and 16.07 per cent, respectively. As per the shareholders’ agreement, Vodafone group companies and Aditya Birla group companies have certain governance and management rights, so long as the promoter group holds 13 per cent or more of the company’s equity share capital on a fully diluted basis. ”The proposed amendment to the Articles of Association is to revise the existing Qualifying Threshold from 13 per cent to 10 per cent (solely for this purpose, disregarding the equity shares originally issued to the Government of India), along with consequent amendments to the definition of ’Share Capital’ and ’Shareholding’ so as to ensure that the Promoter Groups retain governance and management control over the Company,” the filing said.

The governance and management control will enable promoters to appoint directors on the board of the company, appoint and dismiss key employees etc. The government approved Vi proposal converting dues worth Rs 36,950 crore into the company’s equity. With this decision, the government’s stake in Vi increased to 48.99 per cent from 22.6 per cent.

Earlier, the government had converted Vi debt of about Rs 16,130 crore, comprising interest arising from deferment of AGR (adjusted gross revenue) and spectrum instalments in February 2023. The total debt of Vi increased by about 7 per cent to Rs 2.17 lakh crore in December 2024 quarter mainly on account of increase in statutory liabilities. VIL recorded a total debt of Rs 2,03,400 crore in December 2023 quarter. According to the company’s investor presentation, the debt of Rs 2.17 lakh crore comprised Rs 2,14,700 crore payment obligations towards the government and Rs 2,300 crore debt from banks and financial institutions.

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