Is it true that banks may look at conversion of Vodafone Idea debt into equity?

Let me clarify that there is no proposal to convert debt into equity as of yet. The only thing is that banks with large exposures to Vodafone Idea, in a meeting with DOT, confirmed that conversion of debt of the into equity shares could be an option. This was just a suggestion proffered by SBI mainly concerning the AGR dues of nearly Rs.50,000 crore still payable by Vodafone. The overall AGR dues of DOT are close to Rs.90,000 crore.

Most banks have confirmed that as of now they cannot contemplate any action as there was no debt default by Vodafone Idea as of date. Total bank exposure in the form of loans and spectrum fee guarantees to VIL stands at Rs.180.000 crore. This could become a challenge if the bankruptcy was to happen, in which case, conversion to equity was an option. That is all that the banks have said as of now.