With the Supreme Court mandated dues pushing Vodafone Idea to the brink, Vodafone Group CEO Nick Read on Friday met Communications Minister Ravi Shankar Prasad to discuss relief options to keep the company afloat.
The meeting assumes significance as Vodafone Idea Ltd (VIL), where the British telecom giant holds just over 45 per cent stake, is staring at Rs 530 billion (£5.49 billion) in unpaid statutory dues, having paid only Rs 35 billion in two tranches so far.
VIL has said its self assessment pegs AGR liabilities at Rs 215.33 billion, which is just 41 per cent of what the government has estimated.
After the over half an hour meeting with Prasad, Read refused to comment on whether the British telecom giant will exit India, saying “no comments”.
Read also met Finance Minister Nirmala Sitharaman earlier in the day.
Telecom companies are desperately waiting for a bailout package from the government after a Supreme Court order put their statutory liabilities at Rs 1.47 trillion, and all eyes have been on Department of Telecom for the much-needed breather to fix the AGR imbroglio.
VIL recently told the government that it would not be able to pay the full dues unless state support is extended to survive the crisis.
It had made a strong plea for setting off Rs 80 billion of GST credits, a three-year moratorium on payment of the remaining amount which should be staggered over 15 years at a simple interest rate of 6 per cent, drastic cut in licence fee and fixing of a minimum price of calls and data.
The intensity of crisis being faced by VIL can be gauged from the fact that Vodafone Idea Chairman Kumar Mangalam Birla has held multiple rounds discussions at the telecom ministry and finance ministry over last few weeks to look for a solution to keep the telecom operations on track.
In December, Birla had said VIL may have to shut if there is no relief on the statutory dues.
“If we are not getting anything, then I think it is the end of the story for Vodafone Idea,” Birla had said. “It does not make sense to put good money after bad… We will shut shop.”
Even Read recently made it clear that the situation in India is critical, following the AGR ruling of the Supreme Court.
After a Supreme Court rap on February 14 for missing the payment deadline, top telecom firms Bharti Airtel, Vodafone Idea and Tata Teleservices over the last few weeks have scrambled to pay a part of their outstanding dues.
Last month, the Supreme Court rejected a plea by companies such as Bharti Airtel and Vodafone Idea for extension in the payment schedule and asked all of them to deposit an estimated Rs 1.47 trillion in past dues for spectrum and licences. It threatened to initiate contempt proceedings against top executives of these firms for non-payment.
Some telecom firms are already struggling with mounting losses and debt and the additional liability has raised concerns of them defaulting on existing loans. Of the estimated dues that include interest and penalty for late payments, Airtel and Vodafone Idea owe about 60 per cent.
These dues arose after Supreme Court, in October last year, had upheld the government’s position on including revenue from non-core businesses in calculating the annual Adjusted Gross Revenue (AGR) of telecom companies, a share of which is paid as licence and spectrum fee to the exchequer.
