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Vi clears dues to the government till December Qr, pays Rs 1000cr

Vodafone Idea has cleared its dues to the government till the December quarter, comprising revenue share license fee and spectrum usage charges, totaling around Rs 1,000 crore. These are concurrent dues, which are not covered by the four-year moratorium.

The company now needs to clear the dues related to the January-March quarter, which is around Rs 800 crore. Officials said the company has paid 10% of the balance that needs to be cleared.

Queries sent to Vodafone Idea did not elicit any response till the time of going to the press.

Vodafone Idea’s total adjusted gross revenue dues arising from the Supreme Court 2019 order stands at Rs 58,254 crore. Of this, the company has paid Rs 7,854 crore. On the balance amount the government has provided a moratorium, which came into force in September 2021 and is valid till September, 2025.

However, due to its fragile financial position, the company was not able to make timely payments of concurrent licence fee and spectrum usage charge. It made payments with a lag leading to piling up of some dues.

However, with the recent fund raise of around Rs 20,000 crore – Rs 18,000 crore through follow-on public offer and Rs 2,075 crore through the Aditya Birla Group on preferential basis – the company has set about clearing its statutory dues. It has also earmarked Rs 2,175 crore to clear deferred payment liabilities to DoT for the spectrum acquired in 2021 and 2022, which is due in the current financial year.

It also plans to deploy the funds raised for capital expenditure to expand its 4G coverage and launch 5G services.

Besides the equity fundraise, Vodafone Idea has started engaging with a consortium of banks for debt funding of about Rs Rs 25,000 crore and additional non-fund-based facilities of up to Rs 10,000 crore.

Once the current moratorium provided by the government on payment of AGR and spectrum dues ends in September, 2025, the company will need to pay Rs 29,100 crore by the end of March 2026 to the government and Rs 43,000 crore annually from FY27 onwards till FY31.

Vodafone Idea CEO Akshaya Moondra, had earlier told Fe that the the company may urge government for further deferral or conversion of the dues to equity.

At the end of the March quarter, Vodafone Idea’s gross debt (excluding lease liabilities and including interest accrued but not due) was at 2.16 trillion. The gross debt comprises deferred spectrum payment obligations of Rs 1.3 trillion, AGR liabilities of Rs 70,320 crore that are due to the government, debt from banks and financial institutions of Rs 4,212 crore and optionally convertible debentures amounting to Rs 160 crore.

According to analysts, with the fundraise and management clarity to arrest subscribers’ churn and expand coverage, there is a path for the company’s survival.

“The stars are finally aligning for Vi following completion of its long-delayed equity raise. The government’s backing, which we view as tantamount to doing what it takes to ensure that the three-player industry structure stays intact,” said brokerage Citi Research in a note.

“While overall, VIL is definitely in a better position today, it is not yet completely out of the woods, in our opinion. Having said that, there is now a clear path to its survival, which was completely missing before,” said brokerage house Nuvama Institutional Equities.

The company is planning to incur a capital expenditure of Rs 50,000-55,000 crore over the next three years, on the back of recent equity fundraise and proposed bank funding.

Vodafone Idea’s net loss for the January-March quarter expanded to Rs 7,674 crore from Rs 6,986 crore in the preceding quarter. The losses expanded owing to fall in revenues and base effect of preceding quarter where the company recorded a one-time gain of Rs 755.5 crore.

Revenue from operations during the period fell 0.6% q-o-q to Rs 10,607 crore. On a year-on-year basis, the revenue rose 0.7%.The company lost 2.6 million mobile subscribers, taking its user base to 212.6 million at the end of March. Financial Express

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