Vodafone Idea Limited (VIL) has received a much-needed fund infusion worth $200 million or Rs 1530 crore from Vodafone Group Plc, a move that will help the Indian telco manage its operations and employees besides supporting its 300 million customers spread across the country.
Vodafone Group, in a statement, said that it has accelerated payment of $200 million to Vodafone Idea, which was due in September 2020 under the terms of the contingent liability mechanism (CLM) with Vodafone Idea.
Under the terms of the CLM, Vodafone Group said that it is obliged to make payments to Vodafone Idea where amounts paid pursuant to the contingent liabilities of Vodafone India exceed those of Idea Cellular.
“The CLM took effect at completion of the merger of Vodafone India and Idea Cellular in August 2018,” the group said in a statement.
The group said that the payment will help Vodafone Idea employees in the country during this phase of emergency health measures that have been implemented as a result of the COVID-19 or coronavirus pandemic.
The ailing telco is a joint venture between the UK’s Vodafone Group and India’s Aditya Birla group’s Idea Cellular.
Both groups have already made it clear that they will not infuse fresh equity in their Indian telecom venture to help it pay adjusted gross revenues or AGR related dues, such as license fees, penalties and interest, dating back over 14 years, as ordered by the country’s Supreme Court.
Vodafone Group had late last year written off the book value of its Indian business. As per financial results released by Vodafone Group on Tuesday, the book value of Vodafone’s 45% stake in the joint venture, Vodafone Idea, had slumped to zero in November 2019 compared to more than 2 billion euros in June 2018.
As per Vodafone Idea’s self-assessment, its AGR and related dues stand at Rs 21,533 crore, including the principal amount of Rs 6,854 crore, which it has paid already. However, the country’s Department of Telecommunications (DoT) pegs overall AGR dues much higher at Rs 58,254 crore.
“Vodafone Idea has made payments to the Indian government in relation to its AGR liabilities,” Vodafone Group said in the statement.
Be the first to comment