Kumar Mangalam, Sunil Mittal meet Sitharaman1 min read . Updated: 19 Feb 2020, 06:41 PM IST
- The meeting comes a day after Birla met telecom secretary Anshu Prakash
- Vodafone encashment of bank guarantee would leave it with no option but to shut
NEW DELHI : Vodafone Idea Ltd chairman Kumar Mangalam Birla and Bharti Airtel promoter Sunil Mittal met finance minister Nirmala Sitharaman on Wednesday.
Birla is making a last-ditch attempt to save Vodafone Idea after a ₹50,000-crore demand from department of telecommunications threatens to shut down his company even as Mittal told TV channels that the AGR issue wasn't discussed.
The meeting comes a day after Birla met telecom secretary Anshu Prakash.
Vodafone Idea is staring at bankruptcy after a 24 October Supreme Court order found it and Bharti Airtel as well as other telecom operators of under-reporting their revenues, classified as adjusted gross revenues (AGR).
After a 14-year-long legal battle, the apex court upheld the government’s broader definition of AGR which includes dividends and rent received. The DoT argued that these companies held a telecom licence and any revenue earned from it, be it dividend or rent, was derived out of a telecom service. India levies licence fee of 8% of AGR on every telecom licence holder and hence lower the AGR, lower is the licence fee outgo.
The worst hit is Vodafone Idea, given that it only had ₹12,530 crore of cash and equivalent reserves as of December 2019, while bearing a gross debt of ₹1.2 trillion.
Two days ago, the cash-strapped telecom company paid ₹2,500 crore as part payment of its dues. It’s likely to pay another ₹1,000 crore by Friday.
“The board will take further stock of the situation to see how additional payments can be made," Vodafone Idea said in an exchange filing on Monday, the day when Airtel paid ₹10,000 crore of its total dues of ₹35,586 crore to DoT. The Mittal company too is currently in the process of assessing its total dues.
The SC on Monday refused to hear a plea by Vodafone Idea, seeking directions to DoT to not take any coercive steps for recovery of dues, the company said. According to Vodafone lawyer Mukul Rohatgi, encashing bank guarantees would be the last nail in the coffin and the company would then have no option but to close down.