Vodafone Idea, which reported a loss of Rs 6,439 crore in the December quarter, said it had received letters from the department of telecommunications (DoT) directing immediate payment of dues amounting to Rs 54,000 crores after the SC judgment.
‘The company is currently assessing the amount that it will be able to pay to DoT towards the dues calculated based on AGR, as interpreted by the Supreme Court in its order dated October 24, 2019. The company proposes to pay the amount so assessed in the next few days,’ it stated.
Breaking hours of silence after the Supreme Court refused to offer any relief to the financially stressed telecom industry, loss-making firm Vodafone Idea announced on Saturday evening that it would pay its dues linked to adjusted gross revenue (AGR) in the next few days after assessing the amount.
While not specifying how much it would pay out of its total dues estimated at Rs 54,000 crore, the company reiterated that there was uncertainty in continuing as a going concern. The statement came after a board meeting, which discussed the road ahead for the company.
Nick Read, group CEO of UK-headquartered Vodafone, had in November 2019 told reporters in a post-earnings conference, “If you’re not a going concern, you’re moving into a liquidation scenario — can’t get any clearer than that’’.
Read had issued a statement subsequently, saying he was quoted out of context.
Within a month, joint venture partner Aditya Birla Group Chairman Kumar Mangalam Birla said at an event that Vodafone Idea would be forced to shut shop if there was no relief from the government on AGR. Both partners have refused to infuse any fresh funds into the telco.
The Supreme Court had on Friday dismissed the petitions of Bharti Airtel and Vodafone Idea seeking a staggered option to pay their AGR-related dues. Even as Bharti had announced its payment strategy soon after the SC rap on Friday (Rs 10,000 crore by February 20 and the remaining dues before the next hearing on March 17), the most-watched telco Vodafone Idea remained quiet.
Vodafone Idea, which reported a loss of Rs 6,439 crore in the December quarter, said it had received letters from the department of telecommunications (DoT) directing immediate payment of dues after the SC judgment.
“The company is currently assessing the amount that it will be able to pay to DoT towards the dues calculated based on AGR, as interpreted by the Supreme Court in its order dated October 24, 2019. The company proposes to pay the amount so assessed in the next few days,” it stated.
The statement added that as disclosed in the financial statements for the December-ended quarter, the company’s ability to continue as a going concern was essentially dependent on a positive outcome of the application for modification of the supplementary order.
The company is left with Rs 15,390-crore cash as of September 30, 2019, and that’s insufficient to pay the additional liabilities, according to analysts.
It’s possible that the company may again seek a staggered payment option at the next Supreme Court hearing in March while asking banks to restructure its Rs 1.2-trillion debt, a source said.
In its October 24, 2019, verdict, the Supreme Court had upheld the DoT definition of AGR including non-core services as well, and that meant a total Rs 1.47-trillion bill for telcos towards pending licence fee, spectrum usage charge, interest, penalty and interest on penalty by January 23.
The Supreme Court rejected the telcos’ petition to reconsider the order but later agreed to hear their modification plea seeking an option for staggered payments. The SC will hear the case again on March 17.
Photograph: Danish Siddiqui/Reuters.
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