Vodafone Plc’s investment in Vi has zero carrying value, plans to raise funds

In its FY23 report, Vodafone Plc said, “VIL requires additional liquidity support from its lenders and intends to raise additional funds.”

There are significant uncertainties with respect to VIL’s ability to make payments in respect of any remaining liabilities covered by the mechanism and no further cash payments from the group are expected until March 31, 2023.

Further, Vodafone said, “the carrying value of the group’s investment in VIL is nil and the group is not booking any further share of loss in respect of VIL.”

When Vodafone and Idea Cellular entered into a merger agreement in 2017, the parties agreed on a mechanism for payment between the group and Vodafone Idea for certain identified contingent liabilities with respect to legal, regulatory, tax and other According to the difference between crystallization. Issues and refunds related to Vodafone India and Idea Cellular.

Further, in the mechanism, cash payments or cash receipts relating to these matters should be made or received by VIL before it becomes due or payable from the group.

and therefore, any future payments by the Group to VIL as a result of this Agreement shall be made only after the satisfaction of this and other contractual conditions.

Thus, the UK-based telco said, “Vodafone Group’s potential exposure to liabilities within VIL has been limited by the mechanisms described above; Contingent liabilities have not been reported.”

Vodafone plc’s potential exposure to the arrangement has been capped 64 billion (€719 million) after payments made under this mechanism from Vodafone to VIL in the year ending 31 March 2021, totaling 19 billion (€235 million).

This year, on February 7, Vodafone Idea issued equity equivalent to EUR 1.8 billion to the Government of India, which represents the net present value of interest accrued on both deferred spectrum auction tranches and AGR dues as per the relief package announced in September 2021 . To improve the liquidity and financial health of the telecom sector.

In FY23, Vodafone Plc’s revenue rose 0.3% to €45.7 billion, offset by growth in Africa and higher equipment sales, lower European service revenue and unfavorable exchange rate movements. While adjusted EBITDA declined 1.3% to €14.7 billion due to higher energy costs and lower commercial performance in Germany.