InvestorQ : Does the Supreme Court judgment on the telecom AGR issue come as a bigger relief for Vodafone Idea than for Bharti?
Anamika Sodhani made post

Does the Supreme Court judgment on the telecom AGR issue come as a bigger relief for Vodafone Idea than for Bharti?

Answer
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Angel dcosta answered.
2 weeks ago


You are right that among all the telecom companies that are plagued by the AGR dues issue, it is Vodafone that may finally be able to breathe a sigh of relief after the AGR judgment giving 10 years time to the telcos to pay their AGR and spectrum dues.

Vodafone has outstanding dues of Rs.51,000 crore after paying Rs.7,200 crore to the DOT. This will also mean that the promoters could be more inclined to fund the business as the 10 year payment period will ensure that there is immediate risk of bankruptcy.

Late last year, when Vodafone Idea was struggling after the October judgment, both the promoters of Vodafone Idea i.e. Aditya Birla Group and Vodafone PLC, had flatly refused fresh funds as the telecom business was on the verge of financial default.

Now that risk is taken care of and both, Vodafone PLC and Aditya Birla Group, could be willing to hike their stake in the company at much lower prices. However, there is no confirmation still. It is surely a vote of confidence.

Secondly, this judgment is also beneficial for Vodafone as it does not carry any NCLT risks, unlike Bharti Airtel and Jio. Supreme Court has withheld judgment on the outstanding amounts of telcos that have become bankrupt like Aircel, RCOM and Videocon

Bharti Airtel had taken over the spectrum of Aircel and Videocon while Jio had taken over spectrum from RCOM. It is not clear who will pay their dues and whether such dues will be recovered from the eventual beneficiary of the spectrum. That sword still remain hanging.