NEW DELHI: Hit by over Rs 44,000 crore of liabilities arising from the Supreme Court’s verdict on adjusted gross revenue (AGR), Vodafone Idea Ltd’s (VIL) Rs 1 lakh crore of exposure to financial creditors may well take it towards insolvency.
However, its chief financial officer Akshaya Moondra said on Friday the company has not accelerated any payments to its financial creditors, VIL has recorded a whopping Rs 50,922 crore consolidated net loss for the second quarter of the current financial year, primarily due to provisions made toward meeting the SC’s order which has mandated telcos to pay up Rs 92,640 crore in AGR dues to the government within three months.
VIL had consequently taken a charge of Rs 25,680 crore on its balance sheet, with its net worth falling 70 per cent to around Rs 24,000 crore and its net debt to equity ratio soaring to 4.5 times compared to just 1.24 times as of June-end.
The firm currently has a net debt of Rs 1.07 lakh crore raising concerns over the impact on banks and other financial creditors if the firm goes belly-up.
“From time to time, some banks have requested us if we could pre-pay them any amount...we have declined that. We continue to remain engaged with all our financial creditors but there is no acceleration of payment that has happened,” said Moondra during a post-earnings conference call on Friday.
The company’s vendors, meanwhile, “are already supporting (VIL) through vendor financing route”, he added.
As for the possibility of government relief, on which the firm’s future is dependent on according to executives and analysts, VIL CEO Ravinder Takkar said the company has been engaging “very positively” with the government and that its discussions on telecom stress began even before the AGR ruling.
“The response of the government has been very consistent. They said they want this sector to be healthy since it is a very strategic sector and too important for the country… for the Digital India vision,” he said, adding that the government has communicated that it wants “to see three private players and one public sector player in this sector”.
VIL also plans to monetise its 11.15 per cent stake in Indus Towers on completion of the Indus Towers-Bharti Infratel merger.