VI knocked on the government's door for relief in this matter, know the matter

Vodafone-Idea News: Telecom company Vodafone Idea Limited (VIL) has approached the government for relief on Adjusted Gross Revenue (AGR) dues. The company is burdened with heavy debt and is struggling to recover from the liability of AGR dues. Recently, the Supreme Court rejected their curative petition to rectify the calculation of AGR dues, waive penalty and interest, which has dealt a major blow to VIL. According to a PTI report, the company owes about Rs 70,000 crore of AGR.

Talks are going on with government officials

VIL Chairman Ravinder Takkar said during an investor call last Monday that the company is constantly in talks with senior government officials. With reference to the Rs 30,000 crore deal to supply 4G and 5G equipment to Nokia, Ericsson and Samsung, Takkar said discussions are going on with the government to prepare a comprehensive approach for the solution. Following the court's decision, the government has asked VIL to submit appropriate mechanisms and proposals to deal with this challenge.

Stakeholder status in the company

Promoters, Aditya Birla Group and Vodafone hold 37.3% stake in Vodafone Idea Limited, while the government holds 23.2%. VIL Chairman said that the company has a clear understanding with the government that VIL should not pay any liability that is due to calculation error. The company will continue to negotiate with the government on this issue and work towards a solution.

AGR and spectrum payment obligations

Vodafone Idea has a total payment of Rs 2,09,520 crore due by June 30, 2024, which includes spectrum payment of Rs 1,39,200 crore and AGR liability of Rs 70,320 crore. VIL CEO Akshay Mundhra clarified that the Supreme Court rejected his curative petition saying that the petition did not meet the criteria of the court.

Network expansion through big deals

VIL has signed a big contract of Rs 30,000 crore with Nokia, Ericsson and Samsung for supply of 4G and 5G equipment for network expansion. The company has set a total budget of Rs 50,000-55,000 crore for network expansion, out of which Rs 24,000 crore will be spent from the recently raised capital. VIL is in talks with banks for the rest of the funding.

Way forward

Vodafone Idea Limited is currently facing big challenges, including AGR liability, spectrum payment and raising investment for network expansion. However, the ongoing talks with the government and the hope of possible relief measures have raised hopes for the company. VIL's strategy will depend on cooperation and coordination with the government to get out of this financial crisis.