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Last Updated : Nov 14, 2019 01:33 PM IST | Source: Moneycontrol.com

Vodafone to stay invested, CEO writes to PM Narendra Modi: Sources

CEO Nick Read has blamed the media for distorting his remarks

 
 
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The Narendra Modi-led government at the Centre is not happy about Vodafone India's business uncertainty remark. CEO Nick Read reportedly made the statement over the Supreme Court judgement on telecom players paying around Rs 1.33 lakh crore to the government.

"The government has expressed displeasure and disapproves Vodafone CEO Nick Read statement around telecom sector in India," a senior telecom ministry source said.

Now, Read has blamed the media for distorting his remarks and reportedly written to PM Modi to promise that the company is going to remain invested.

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Also Read: Birla favours insolvency for Vodafone Idea if situation worsens

The source said that Read has informed the government that the media has misrepresented his statement and Vodafone is confident of India growth story and wants to stay invested in India.

While sharing financial performance report of Vodafone, Read had said that "following the Supreme Court AGR ruling (adjusted gross revenue) on top of the financial stress already present, the situation of the telecom sector in India and Vodafone Idea is critical".

The company's financial performance statement said that significant uncertainties exist in relation to Vodafone Idea Ltd's (VIL) ability to generate the cash flow that it needs to settle or refinance its liabilities and guarantees as they fall due, including those relating to the (Supreme Court) judgement.

"VIL is seeking relief from the Indian government, including, but not limited to, granting a waiver of interest and penalties relating to the judgement," the statement said.

According to an internal estimate prepared by the DoT, total dues on the telecom service providers arising out of SC order are around Rs 1.33 lakh crore.

As per estimate, liability of Bharti Airtel Group is Rs 62,187.73 crore, Vodafone Idea Rs 54,183.9 crore and BSNL and MTNL Rs 10,675.18 crore.

Vodafone, however, estimates VIL liability to be around Rs 28,310 crore and that of group's exposure capped at Rs 8,400 crore.

"Having considered the possible future developments for VIL, the Group has concluded that there are significant uncertainties in relation to VIL's ability to settle the liabilities relating to the AGR judgement and has not assessed a cash outflow under the agreement to be probable at this time," Vodafone statement said.

Following displeasure expressed by government, Read in a letter to the Prime Minister is learnt to have said that some of the coverage, particularly in India, has been distorted.

Read said that he spoke specifically about financial stress in telecom sector in India and that situation had become critical. He mentioned that during his recent India visit and interaction in government, there was a genuine appreciation of the situation and a desire to intervene to address the issues.

Vodafone CEO was appreciative of the government setting up the Committee of Secretaries to take a comprehensive view on all aspects including the AGR matter.

Read in his letter is learnt to have said that Vodafone Group believes in the potential of India and it remains a key market for the group.

Email query sent to Vodafone and Vodafone Idea did not elicit any reply in this regard.

(With inputs from PTI)

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First Published on Nov 14, 2019 01:04 pm
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