Vodafone Idea (Vi) has sought release of bank guarantees (BGs) worth around ₹15,000 crore, held up with the Department of Telecommunications (DoT) against the telco’s adjusted gross revenue (AGR) dues. The cash-strapped telco has also sought freezing of the AGR dues on the day of the Supreme Court judgement of October 24, 2019.
“Vodafone has expressed the need to release bank guarantees since the AGR dues themselves have been deferred by four years,” a senior government official said. “The company also wishes that the date of the apex court order in favour of the government be frozen as the date till which to compute the AGR dues.”
Vodafone Idea’s contention is that since the government’s relief package has allowed the company to pay its AGR dues after four years and also secure the repayment through an option to convert the principal due amount into further government equity in the company, there was no need to keep holding onto the bank guarantees, the official said, explaining the carrier’s point.
The telco has told DoT that its potential investors were seeking these finer details as the loss-making telco races to tie up external funding by its self-mandated March end deadline. Vi’s board is scheduled to meet in March 3 to consider its fund raising options.
The DoT, in its affidavits to the government, has pegged Vi’s AGR dues at around ₹58,254 crore. This included licence fees and spectrum usage charge (SUC) demands calculated up to FY2016-17. On these outstanding amounts, interest, penalty and interest on penalty was calculated up to October 2019, the government has said.
Of its dues, Vi has already paid over ₹7,854 crore. The operator, in its October-December earnings statement, though pegged its AGR dues at ₹64,620 crore, factoring in additional interest and penalty calculations on top of DoT’s computations for the interim period.
The government as part of the telecom relief package announced in September had allowed telcos to defer spectrum as well as adjusted gross revenue (AGR) dues by four years, to be repaid with interest. It had also cut BG requirements against statutory dues such as licence fees by 80%.
The official added that the DoT is “examining” Vi’s request.
The DoT though has already started to return some BGs. On December 3 the department had returned BGs worth around ₹2,500 crore and ₹4,000 crore to Vi and Airtel, respectively. Vi has said that at any time, the DoT has some ₹23,000-25,000 crore worth of BGs furnished by the telco. Pehal News