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Crowny Pinto made post

What is the latest on Vodafone Idea after Mr. Birla hinted that he may be forced to wind up the telecom business?

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Mahima Roy answered.
8 months ago

In fact, Mr. Birla has been stating that if the government does not give some relief to Vodafone Idea, then the Birla group may be forced to shut down the operations of the company. Vodafone is not very interested in running the business in India and they have already expressed the same. Vodafone Idea needs to pay the DOT Rs.53,000 crore as AGR charges due to under estimation of adjusted gross revenues. This includes a substantial portion of interest and penalty. Both Bharti and Vodafone Idea have been asking for waiver of the interest and penalty clause and giving the telecom companies more time to repay the dues. Currently, the deadline is January 24, 2020, which is a very short time to rustle up the resources.

For the time being, Vodafone Idea has given a mandate to Brookfield and Edelweiss ARC to find a buyer for its towers business and also to work out a plan wherein they can hive off assets to the tune of $2.5 billion. That will take care of the principal amount to be paid under AGR while the negotiations over the interest and penalty can go on. It remains to be seen what stand the government and the DOT take on this issue and that could be critical going ahead.