Bharti Airtel Expresses Doubt Over Continuing Operations As Going Concern

Telecom operator Bharti Airtel, on November 14, expressed doubt about its ability to carry on operations in the aftermath of the Supreme Court’s judgement on the definition of adjusted gross revenue (AGR).

“The Group will require significant additional financing to discharge its obligations under the Court Judgement; the management’s actions include, inter alia, accessing diversified sources of finance,” it stated in a release.

“The Group has an established track record of accessing diversified sources of finance across markets and currencies. However, there can be no assurance of the success of management’s plans to access additional sources of finance to the extent required, on terms acceptable to Group, and to raise these amounts in a timely manner. This represents a material uncertainty whereby, it may be unable to realize its assets and discharge its liabilities in the normal course of business, and accordingly may cast significant doubt on the Group’s ability to continue as a going concern.”

The Sunil Mittal-led company said the apex court judgement — which had upheld government’s way of calculating revenue of telcos (on which statutory liabilities like licence fee and spectrum usage charges are computed) — has “significant financial implication for the company”.

The company posted a staggering Rs 23,045 crore net loss for the second quarter ended September 30, due to provisioning of Rs 28,450 crore in the aftermath of the Supreme Court ruling on statutory dues.

Last month, Bharti Airtel had postponed the release of its full Q2 earnings to November citing the uncertainty in the sector in the wake of the court ruling on definition of telecom revenues.―Money Control