AGR Dues Payment: Bharti Airtel, Vodafine Idea in SC, seek more time

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Published: January 21, 2020 5:48:03 AM

The companies are likely to mention their pleas for urgent hearing today.

bharti airtel, vodafone ideaBharti Airtel, which filed a petition seeking more time to pay, is better placed than Vodafone Idea to pay its Rs 35,586 crore dues as it has just completed a fund raise of $3 billion through qualified institutional placement and foreign currency convertible bonds.

With only three days left for telecom operators to collectively pay adjusted gross revenue (AGR) dues worth Rs 1.47 lakh crore to the government, operators Bharti Airtel, Vodafone Idea and Tata Teleservices on Monday moved the Supreme Court seeking permission to approach the department of telecommunications (DoT) for scheduling the payment and other reliefs like more time to pay the amounts and easier terms.

Of the total Rs 1.47-lakh-crore AGR dues, the share of these three companies comes to Rs 1.02 lakh crore.

The basic purpose behind telcos’ prayer is to seek the apex court’s permission to approach DoT for possible negotiations on the terms and conditions of payment — meaning some token payment is made by the deadline of January 23 while the rest is paid in deferred instalments. The telecom operators want the Supreme Court to empower the DoT to provide them some concessions, maybe as reduced interest rates or something similar, which the court “deems fit and proper”.

The companies have ruled out filing separate curative petitions, which they had indicated on January 16 when the apex court had rejected their limited review petitions.

The companies are likely to mention their applications for urgent hearing on Tuesday.

The companies, in their fresh petition, have stated that the telecom sector has reported huge losses and is struggling for survival, and therefore they are not in a position to make either upfront payment or provide any financial bank guarantees to securitise their dues, thus it would not be possible for them to make the entire payment within the stipulated time frame.

Seeking more time to pay, Vodafone Idea, for instance, has said that it does not have the “resources” and “even banks and financial institutions do not have enough security to lend money for payment to the DoT to comply with the SC orders”.

Apart from AGR dues of Rs 53,039 crore, Vodafone Idea owes the government by way of deferred spectrum instalment Rs 157,750 crore (it needs to pay this by 2031 in instalments) and Rs 5,712 crore as one-time spectrum charge (under litigation). The company’s total exposure to banks is of Rs 49,466.43 crore.

“If a suitable and appropriate arrangement/payment term is not made available, it will lead to immediate closure of one of the oldest and largest telecom companies in India. In addition, there will be disruption and inconvenience to its more than 300 million subscribers, not to mention lakhs of jobs being put at risk,” Vodafone Idea said in its petition. It added that the SC may “permit it to submit a suitable application to the government to decide upon the schedule of payment and for other reliefs”.

It urged the court to pass appropriate orders so that it can continue to operate as a going concern rather than face liquidation.

Bharti Airtel, which also filed a petition seeking more time to pay, is however, better placed than Vodafone Idea to pay its Rs 35,586 crore dues as it has just completed a fund raise of $3 billion through qualified institutional placement and foreign currency convertible bonds.

As is known, the SC in its order dated October 24, 2019, had upheld the government’s definition of AGR which includes all revenues of a licence holder including those from non-core telecom operations such as rent, dividend and interest income.

Since the order to pay the amount has come from the SC, the government has so far been unwilling to provide any relief to the operators.

Of the overall Rs 1.47 lakh crore which the telecom industry needs to pay up, the licence fee dues stand at Rs 92,642 crore while spectrum usage charge is at Rs 55,054 crore.

Apart from the telcos, even the non-telecom public sector undertakings which together need to pay over Rs 3 lakh crore, would now need to pay up by January 23. However, the DoT is of the view that since these PSUs were not party to the case, the January 23 deadline does not apply to them.

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