Vodafone Idea adds Rs 700 crore to its pending dues to Govt

Vodafone Idea has been able to clear all payments till FY22. (Image/Reuters)

The financial crunch at Vodafone Idea, which has so far been unable to raise funds from investors, is showing as the company’s dues to the government towards quarterly statutory dues like licence fee and spectrum usage charge, have risen by Rs 702 crore, as it has not been able to make payment for the October-December quarter of the current fiscal. With this the telecom operator’s total dues to the government has gone up to over Rs 1,000 crore.

According to sources, the company has been able to clear only 10% or Rs 78 crore of the statutory dues for the quarter, adding that it has sought some additional time from DoT to clear the pending dues.

Though delayed, Vodafone Idea has been able to clear all payments till FY22, which is outside the four year moratorium – FY22-26 – provided by the government. It has some pending dues for FY23 and the July-September quarter of the current fiscal, which adds up to around Rs 300 crore.

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Queries sent to Vodafone Idea towards its pending due amount did not elicit any response till the time of going to the press. The company was expecting to finalise a fund raising plan by December 2023, which did not materialise.

In August and October last year, Vodafone Idea CEO Akshaya Moondra had said the talks to conclude external funding were making good progress. “Particularly in the last one month some of these discussions have started progressing to a level of due diligence or proposals being discussed with these investors,” Moondra had said in August during the quarterly earnings call with analysts.

The company has been focusing to tie-up equity investments first, basis which banks will lend to the company, Moondra had said in October last year.

At the end of the July-September quarter, Vodafone Idea’s gross debt (excluding lease liabilities and including interest accrued but not due) rose to Rs 2.13 trillion. The gross debt comprises deferred spectrum payment obligations of Rs 1.35 trillion, adjusted gross revenue (AGR) liabilities of Rs 68,180 crore that are due to the government, debt from banks and financial institutions of Rs 7,860 crore and optionally convertible debentures amounting to Rs 1,610 crore.

In September last year, the company had paid Rs 1,700 crore to the government which includes the dues for the 5G spectrum and other spectrum acquired previously. “We had gotten some bank funding to tide over the short-term mismatch that we had in the last quarter (July-September),” Moondra had said.

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One of the promoter group — in all likelihood be Aditya Birla group — had committed to infuse Rs 2,000 crore into the company for meeting impending payment obligations, but Vodafone Idea did not receive that till the July-September quarter, according to the information disclosed by the company.

The government has a 33.1% stake in Vodafone Idea. The company is yet to launch 5G services and is awaiting external fund raise to repay its vendor dues and invest in its network.

Meanwhile, Tata Communications has also decided to discontinue its arrangement of providing services to Vodafone Idea. The company, through one of its subsidiaries, has trade receivables from Vodafone Idea to the tune of Rs 221.19 crore as on December 31, 2023.

“During the quarter ended December 31, 2023, the subsidiary based on the strategic assessment has issued a termination notice to the said customer and is in discussion on a disengagement transition plan,” Tata Communications disclosed in its October-December earnings on Thursday, without taking the name of the telco. “The group believes that the balance is good and recoverable basis its on-going interactions with that customer,” Tata Communications added.