New Delhi, Jan 9 (PTI) Beleaguered telecom operator Vodafone Idea will pay the government Rs 1,144 crore over period of next 10 years and rest of the adjusted gross revenue dues, frozen at Rs 87,695 crore by the union cabinet, from March 2036 onwards, the company said on Friday.
The government has frozen AGR dues of Vodafone Idea (Vi) at Rs 87,695 crore, which the struggling company has to start paying from the 2031-32 fiscal year and clear by 2040-41.
In addition to this, the government has given six years time to Vi to clear AGR dues pertaining to 2017-18 and 2018-19 from 2025-26 to 2030-31 without any change.
Vi, however, said the entire AGR dues comprising principal, interest, penalty and interest on penalty for the period from 2006-07 to 2018-19 as of December 31, shall be frozen and shall be payable in various tranches.
“Maximum Rs 124 crore to be paid annually over next 6 years i.e. March 2026 to March 2031; Rs 100 crore to be paid annually over 4 years i.e. March 2032 to March 2035; the remaining AGR dues, has to be paid in equal installments annually over 6 years, i.e. March 2036 to March 2041,” the company said in a regulatory filing.
The moves provide a fresh lease of life to the company as the debt-ridden firm had to pay around Rs 18,000 crore by March 2026 and a similar amount every year for the next six years in the absence of relief from the government.
VIL, in a letter to the DoT earlier this year, said its liabilities to the government are to the tune of about Rs 2 lakh crore, which includes Rs 1.19 lakh crore towards spectrum dues.
The company said in case of no support, the Centre will face significant direct monetary loss with no recovery of spectrum dues, equity value of Rs 53,083 crore becoming nil, and no recovery of AGR dues.
The annual liabilities of VI were more than double its annual operational cash generation, which has been in the range of Rs 8,400-9,200 crore for the last three years.
Vi said a committee is to be constituted by DoT to reassess the AGR dues, whose decision shall be final.
“Thereafter, the reassessed amount is to be repaid between March 2036 and March 2041 in equal annual installments,” the filing said.
Analysts expect that the reassessment is likely to reduce Vi’s AGR dues and the relief given by the government may help it raise Rs 25,000 crore debt that the company has been looking for investment in the networks.
“In our view, this could fast-track the completion of Vi’s Rs 250 billion (Rs 25,000 crore) bank debt raise and potentially enable another equity raise down the line. Besides meaningfully lifting concerns on Vi’s ability to service government dues and therefore on its ability to continue as a going concern, these should also enable the company to revive its network investments,” a Citi report said.
An Ambit Capital report said a decisive government action with possible upside from reassessment would enable Vi to raise bank funding — necessary for carrying out survival capex.
The report said a favourable verdict from the Supreme Court has already enabled Vi to raise Rs 3,300 crore through non-convertible debentures recently. PTI PRS TRB
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