 "Vodafone Idea, CEO, Akshaya Moondra")
Vodafone Idea, CEO, Akshaya Moondra
Cash-strapped Vodafone Idea (Vi) has begun a ‘fresh dialogue’ with the government on the adjusted gross revenue (AGR) dues issue, CEO Akshaya Moondra told analysts on Monday. He also said the telco expects its ongoing efforts to raise debt funding to complete in the next two months, having completed the techno-economic evaluation (TEC) by an independent third party.
Last week, the Supreme Court rejected a batch of curative petitions from telcos, including Vi, seeking a review of the massive Rs 1.43 trillion cumulative AGR dues payable by them. The telcos had sought corrections in the dues calculated by the Department of Telecommunications, citing ‘arithmetic errors’ in the calculation.
“While a positive outcome would have no doubt eased the liability and enabled faster deleveraging, we would like to reassure you that the long-term business plan and revival strategy remain unaffected. The curative petition outcome does not create any impact or modification on cash flows, as already considered in our business plans,” Moondra said. The long-term plan did not factor in any potential benefit in the AGR matter, he insisted.
With a 23 per cent equity stake in Vi, the government is clearly the largest stakeholder in the company, Moondra said. While Vi had estimated its AGR dues at Rs 21,533 crore, DoT pegged the same at a whopping Rs 58,254 crore. The telco has so far paid only Rs 7,900 crore.
Vi’s total debt stood at Rs 2.09 trillion at the end of the first quarter (April-June) of FY25. This includes deferred spectrum payment obligations of Rs 1.39 trillion and adjusted gross revenue (AGR) liability of Rs 70,320 crore due to the government. After the payment moratorium ends in October 2025, Vi has to pay Rs 12,000 crore to the government, including both principal and interest, by March 2026. It also needs to pay Rs 43,000 crore annually to the government for five years, from FY27 till FY31.
Lenders and vendors
Vi remains engaged with its existing and new lenders for Rs 25,000 crore of fund-based and Rs 10,000 crore of non-fund-based loans. “The TEC report has been submitted to all the banks and financial institutions, which will now allow them to progress with their internal evaluation and approval processes. We expect the bank funding to conclude in the next 7-8 weeks,” Moondra said.
Despite the telco raising Rs 24,000 crore of equity so far, three senior bank officials from as many banks had told Business Standard earlier this month that they remain doubtful over the company’s multiple payment liabilities to the government, vendors, and tower companies. Meanwhile, the telco remains confident of clearing existing bank debt, which has reduced to a low level of Rs 4,800 crore at the end of the Q1 (April-June) quarter, down from Rs 9,200 crore a year ago.
Moondra said the latest $3.6 billion or Rs 30,000 crore deal with global vendors Nokia, Ericsson, and Samsung has covered the entirety of the radio equipment needed by the company for its planned expansion of 4G coverage to 1.2 billion Indians, up from 1.03 billion now. Announced a day ago, the mega deal is Vi’s first in years and marks the telco’s first-ever sourcing agreement with South Korean giant Samsung. It is part of the total capital expenditure target of $6.6 billion (Rs 55,000 crore) over the next three years.
First Published: Sep 23 2024 | 5:46 PM IST
