Vodafone Idea silent on dues, hopes to get govt bailout

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Published: November 16, 2019 6:13:29 AM

Elaborating on the discussions VIL has had with the government, so far, VIL’s MD & CEO Ravinder Takkar said the company would like to see a moratorium over spectrum payments, reduction licence fees to help in the areas of GST blockage, as well as a few other things, which would reduce levies on the sector.

Vodafone Idea, Vodafone due, vodafone idea news, vodafone idea share price, vodafone idea share price nse, vodafone idea loss, vodafone idea ltd, industry newsVIL on Friday said it has reduced its capital expenditure guidance for the year ended March 31, 2020, to Rs 13,000 crore from Rs 17,000 crore. (Image: Reuters)

A day after Vodafone Idea reported a loss of Rs 50,922 crore, the company on Friday did not comment on how it proposed to fund the liabilities of Rs 44,000 crore that has arisen after the Supreme Court’s ruling on the adjusted gross revenue matter. The company had a total cash balance of Rs 21,000 crore at end June, which further came down to Rs 15,390 crore at the end of September. The company’s chief financial officer Akshaya Moondra in response to a query during its analyst call on Friday on funding the AGR related dues said that the company “will wait for the decision of the government on this front”.

According to an analysis done by Kotak Institutional Equities after the company’s Q1 earnings, by January-March FY21 Vodafone would have a funding gap of Rs 7,600 crore.

Elaborating on the discussions VIL has had with the government, so far, VIL’s MD & CEO Ravinder Takkar said the company would like to see a moratorium over spectrum payments, reduction licence fees to help in the areas of GST blockage, as well as a few other things, which would reduce levies on the sector.

VIL on Friday said it has reduced its capital expenditure guidance for the year ended March 31, 2020, to Rs 13,000 crore from Rs 17,000 crore.

The revision in capex is primarily on account of savings resulting from better pricing and disintegration of components while ordering, and reduction in planned 4G footprint in non-priority areas. Takkar told analysts, “Further, lower capacity requirements during the year have also resulted in deployment of some Capex to the next financial year”.

It is evident that the company is expecting relief from the government. Takkar said that the committee of secretaries (CoS) formed by the government are close to making some recommendations. “We understand that they are getting very close, and they have met several times. So we’re looking forward to hearing that,” he said. He added that the response from several engagements with government over providing relief to the stressed sector, have been “consistent”. “They have said to us that they want to see three private players and one public player in this sector,” he said. He added that the cabinet secretary and officials of the concerned ministries that VIL has met have expressed that they want the sector to be healthy and that it is important for the Digital India Vision.

“At the same time, on the AGR case, we would like to see interest, the penalties, and the interest on penalties, may be given relief from, as well as on the principal amount after adjusted for errors and so on. If we can have some type of a payment plan, which spreads it over a large period of time, a number of years that would be very, very helpful,” Takkar said.

Over reports that some relief maybe coming to the telcos rescue soon, despite high losses reported on Thursday, shares of Vodafone Idea rallied as much as 24.75% on Friday — its biggest single-day gain since January 2017 — to end the session at Rs 3.68 on BSE. The stock of Bharti Airtel also surged the most in last one year, up 8.4% to close at Rs 393.20.

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