Emerging as another breather to Vodafone Idea, the telecom operator has revised its agreement with the Vodafone Group promoters to recover ₹5,836 crore from outstanding dues which arose from legacy liabilities linked to its 2017 merger with Idea Cellular.
The amendment changes the March 2017 agreement, which created the Contingent Liability Adjustment Mechanism (CLAM) to compensate the company for legal, regulatory and tax liabilities arising after the merger.
Hybrid of Cash and Equity Mechanisms
In a regulatory filing to stock exchanges, the telco set out two phases for recovery. Firstly, Vodafone Group promoters will release ₹2,307 crore in cash over the next 12 months. In addition, 328 crore equity shares of Vodafone Idea, held by certain Vodafone Group shareholders, have been earmarked for five years.
Proceeds from the sale of these shares will accrue to Vodafone Idea. Based on the closing share price of ₹10.76 on the NSE, the shares are currently valued at ₹3,529 crore.
Thus, the remaining CLAM amount would be recovered through a combination of cash payments and equity-backed arrangements.
Resolving Post-Merger Liability Disputes
The company had earlier recognised ₹8,369 crore as receivable under CLAM, of which ₹1,975 crore has already been paid by the Vodafone Group. The amended structure ensures recovery of the balance amount despite the original sunset clause for CLAM expiring on June 30, 2025, which was subsequently extended to December 31, 2025. The outstanding recoverable amount stood at ₹6,394 crore.
Vodafone Idea clarified that receipt of the CLAM amount is not contingent upon any prior payment to the Department of Telecommunications.
