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Friday 10 April 2020

Vodafone-Idea: We’re paying up but our future depends on SC

Vodafone-Idea promoters Britain's Vodafone Group and India's Aditya Birla Group said that the company would shut down without this relief

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Vodafone-Idea AGR, a telecom company caught in a financial crisis plagued by huge debt and constant losses, is ready to pay the statutory dues to the government. However, it says it can continue its business only when the Supreme Court considers leniently the time-limit given to repay the arrears of Rs 53,000 crore to the Department of Telecommunications (DoT).

The apex court had on Friday ordered all telecom companies to pay their adjusted gross revenue (AGR) dues to the DoT by that midnight.

Vodafone-Idea is burdened with a debt of more than Rs 1.1 lakh crore. The Supreme Court’s verdict on the AGR has had the most impact on it. The company said it was assessing how much money it could pay to the government.

Fearing whether it would be able to pay the AGR dues to DoT, the company said in a statement, “The company is currently assessing the amount that it will be able to pay to DoT towards the dues calculated based on AGR (Adjusted Gross Revenue), as interpreted by the Supreme Court in its order dated 24 October 2019. The company proposes to pay the amount so assessed in the next few days.”

However, it has also made it clear that it needed relief in terms of the payment deadline. The full statement follows.

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The Supreme Court, in its order dated 24 October last year, had asked the companies to repay the dues within three months (till 23 January). Subsequently, the companies had filed a petition asking the court to reconsider the deadline for repaying the arrears, but it was dismissed on Friday.

Vodafone-Idea and its promoters Britain’s Vodafone Group and India’s Aditya Birla Group have already said that the company would shut down if it did not get relief from the Supreme Court.

While Vodafone-Idea is considering the amount it will pay, Sunil Mittal’s Bharti Airtel has made its intention clear by committing to pay the dues before the deadline. As per the court order, Airtel has to pay Rs 35,000 crore under the head of AGR. It has said it would pay Rs 10,000 crore by 20 February and the remaining amount before the next hearing of the court on 17 March.

Tata Teleservices, which has sold its telecom business to Airtel, has committed to pay the outstanding AGR of about Rs 14,000 crore before the next hearing of the Supreme Court too.

While the telecom companies are looking for ways to settle the AGR dues, the Supreme Court order has proved to be a major setback for many public sector undertakings. Non-telecom companies — GAIL, Oil India, PowerGrid and Delhi Metro — have been asked to pay their respective AGR amounts as well.

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