BackVodafone Idea pays up licence fee dues for Q1
Payment a signal that telco may yet avoid a collapse if govt steps inVoda Idea has ₹1.92 tn total liabilities of which ₹58,000 cr is AGR dues
PremiumVodafone Idea Ltd on Thursday paid its entire licence fee dues for the quarter ended June, offering hope to investors that the company may yet avoid a collapse if the government comes out with a rescue package for the struggling industry.
While the company did not specify the amount, a spokesperson for the company said that the telco has paid the entire outstanding dues for the quarter.
While the amount is likely minuscule when compared to its total dues of ₹22,500 crore that it needs to settle between December and April to repay a mix of regular debt to lenders, AGR (adjusted gross revenue) and spectrum dues, analysts said that the development does add to its survival hopes.
Vodafone Idea has a total liability of ₹1.92 trillion. Out of this, it owes ₹58,000 crore to the government as AGR dues. The rest of the amount includes spectrum-related dues and bank loans. In August, Kumar Mangalam Birla stepped down as the chairman of Vodafone Idea, a post he had held since Idea Cellular‘s merger with Vodafone India in 2018.
Birla’s stepping down was widely viewed as an attempt to distance himself from the company.
In a letter to the cabinet secretary in June, Birla offered to hand over Aditya Birla group’s stake in the telco to the government or a government-approved entity, citing the company’s dire financial situation, which he warned made the company’s collapse imminent in the absence of a bailout.
In July, the Supreme Court dismissed the telco’s plea to allow payment of self-assessed AGR dues that are way lower than that demanded by the telecom department.
With the judgement going against it, the company’s fundraising plans came to a grinding halt. Mint reported on 23 July that several investors who were exploring an investment in the company backed away from talks as the funds’ infusion was contingent on the Supreme Court allowing the company to pay recomputed AGR dues, which would have eased the burden on the telecom service provider to a large extent.
On 10 August, the company approached the Supreme Court once again, seeking a review of its 23 July order.
During an earnings call earlier this week, Vodafone Idea chief executive Ravinder Takkar said that the telecom company is hopeful that the government will offer the necessary support to address structural issues in the sector and emphasized that setting a minimum industry-wide tariff, even if it is a temporary measure, could go a long way in helping the struggling telcos.
Vodafone Idea had posted a narrower consolidated loss of ₹7,319 crore for the quarter ended 30 June from ₹25,460 crore in the year-ago period.
Revenue from the telco’s operations declined by 14% to ₹9,152.3 crore from ₹10,659.3 crore in the year earlier period.
Total gross debt (excluding lease liabilities and including interest accrued but not due) as of 30 June stood at ₹1.92 trillion.
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