Senior executives at large public sector banks (PSBs) said on Friday that the government’s AGR moratorium for Vodafone Idea has provided lenders some comfort on incremental exposure, though formal discussions with the telco are yet to begin. The bankers said the relief could improve the viability of fresh funding proposals.
“Things have become favourable after the government’s decision. This is a positive development,” said a banker with a large PSB. Saying that they would assess the situation, another banker confirmed that things look better hereon.
Improved Viability for Fresh Capital Infusion
Vodafone Idea has been in talks to raise about Rs 25,000 crore, and public sector banks may evaluate participation after reviewing the government’s order in detail.
However, some banks may still take a cautious stand, given the company’s continuous loss of subscribers and revenue market share over the past several quarters.
Navigating a ₹2.17 Lakh Crore Debt Overhang
Currently, the SBI-led consortium has a total exposure of Rs 11,000 crore to the company, which includes term loans as well as working capital loans across fund and non-fund based exposures.
However, the total debt of Vi is Rs 2.17 lakh crore, of which Rs 1.9 lakh crore are dues to the government for spectrum and AGR.