Vodafone Idea had cash and cash equivalents worth Rs 9.2 billion at the end of June
Banks led by State Bank of India (SBI) have called upon the government to give more time to debt-ridden Vodafone Idea to clear its tax dues and spectrum charges, said two bankers and a government official familiar with the matter. The Supreme Court last year ordered the mobile carrier, a joint venture between the Indian arm of UK’s Vodafone Group, and the Aditya Birla Group’s Idea Cellular to pay over $8 billion to the government to settle long-standing dues. Had given.
Vodafone holds about 44 per cent stake in the company and Aditya Birla holds about 27 per cent. In June, Kumar Mangalam Birla, the then non-executive chairman of Vodafone Idea, warned that without government relief, the Indian mobile carrier’s “financial condition would drive its operations to an irreversible point of collapse”.
Vodafone Idea’s gross debt stood at Rs 1.9 trillion as of June 30, which includes deferred spectrum payment obligation of Rs 1.06 trillion and adjusted gross revenue liability of Rs 621.8 billion, its latest stock exchange filing in June showed. Adjusted gross revenue is the usage and license fee charged by the government from telecom operators. The mobile operator also said it owed 234 billion rupees ($3.18 billion) to financial institutions.
Senior SBI officials and representatives of the Indian Banks’ Association (IBA) this month met officials from the Finance and Telecom departments to propose immediate relief on repayment of spectrum dues, said two bankers and government officials, who requested anonymity. , told Reuters. “We have had these discussions with banks, but the point is that the finance ministry should be comfortable with the measures,” the government official said.
SBI, IBA, and the finance and telecommunications departments did not respond to requests from Reuters seeking comment. A banker said the company is facing repayment of Rs 5-10 billion of non-convertible debentures around January. Vodafone Idea declined to comment.
Vodafone Group did not immediately respond to an email seeking comment.
A spokesperson for the Aditya Birla Group declined to comment. Vodafone Idea had cash and cash equivalents of Rs 9.2 billion at the end of June, said a transcript of a company conference call published on its website. Vodafone Idea exposure said.
A government official and two bankers said the bankers have also proposed to give some relief to Vodafone by restructuring its dues. Mr Birla stepped down as chairman early last month after appealing for a government bailout. The government is considering a comprehensive package to help the telecom industry hit by the entry in 2016 of Mukesh Ambani-controlled Reliance Jio, which rocked the market with its free voice and cut-price data plans.
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