Banks to seek govt guarantee on equity conversion before lending to Vi

The telecom giant is seeking to borrow approximately Rs 35,000 crore, but most banks are wary of extending credit, particularly as VI has struggled to raise funds from other sources

Some public sector banks are planning to seek assurance from the government that it would convert part of its dues lying with Vodafone Idea (VI) into equity, according to three senior executives of banks who spoke to Business Standard on condition of anonymity. Their banks have been approached by the cash-strapped telecom company for fresh loans.

“Banks are still hesitant to provide funding to VI, but the company keeps approaching us. To move forward, banks are planning to meet with the government to request a commitment to convert its dues into equity in VI,” one of the sources