The court said that the government needed money due to the Corona epidemic. Make a plan for payment of AGR Dues at the earliest. The next hearing of the case will be held in the third week of July.
Vodafone Idea may find it difficult to pay incremental upfront dues of over Rs 50 billion in AGR dues. Credit Suisse, a brokerage, stated this in its report. A report states that after paying Rs 69 billion AGR dues, it is estimated that Vodafone Idea will have Rs 60 billion in cash left by March 2020, as there was no incremental CAPEX in the fourth quarter of FY 2020.
Credit Suisse said it would be difficult for VIL to pay incremental dues of more than Rs 50 billion due to Vodafone India Limited (VIL) not having access to incremental debt funds. On the other hand, there will be no problem with incremental advance payment on payment of arrears of 48%. At the same time, Bharti Airtel will not have any problem with incremental upfront payment.
The report states that the VIL cash flow situation will be challenging after FY22. According to the report, VIL can manage its cash problems by FY22 on a two-year moratorium. It added that the company may find it challenging to pay a separate AGR arrear from 2022 onwards.
It is known that Bharti Airtel and Vodafone Idea Ltd. The Department of Telecommunications has sought some time to respond to the affidavits filed by private communication companies like AGR for payment of dues related to AGR. In the ongoing hearing in the Supreme Court on Thursday, the court has asked Idea and Vodafone to show the balance seat. The court said that the government needed money due to the Corona epidemic. Make a plan for payment of payment at the earliest. The next hearing of the case will be held in the third week of July.
All the telecom operators are facing trouble because of the AGR dues. Earlier the supreme court directed all the telcos to submit an affidavit regarding the payment of AGR dues. Vodafone Idea counsel stated that the telco could not secure bank guarantees, and it does not have money to pay employee’s salaries and meet operating expenses.
However, both Bharti Airtel and Vodafone Idea have suggested spectrum, licenses, and earlier bank guarantees to be considered as securities for deferred payment mechanism of massive AGR dues. Currently, Bharti Airtel is in a better position to clear AGR dues. The telco giant has already cleared 48% of AGR dues as per DoT estimates whereas Vodafone Idea has just cleared 13% of the AGR dues as estimated by DoT.