DoT releases bank guarantees of Airtel and Vodafone Idea: Report

Vodafone Idea (Representative Image)

The Department of Telecom (DoT) has released bank guarantees (BGs) of Bharti Airtel (BAL) and Vodafone Idea (VIL). The telecom department has also asked the telecom companies to refurnish BGs in an amount equivalent to their next payable instalment 13 months prior to the due date.

The telecom department has filed an affidavit in the Supreme Court stating that the bank guarantees have been returned, according to a report in the Economic Times.

The DoT has returned Airtel and Vodafone Idea bank guarantees of Rs 7,000 crore and Rs 15,000 crore respectively, the publication reported, citing sources.

Moneycontrol could not independently verify the report.

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The DoT, according to the publication, in an affidavit filed before the Supreme Court on April 7, said, “Pursuant to the Cabinet decision and in view of the fact that VIL and BAL had opted for such moratorium on spectrum auction installments and no installment is due necessitating security in the form of financial bank guarantees till 13 months before the next payable installment post moratorium period, DoT has returned the existing bank guarantees,” the DoT said in its affidavit."

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In March, Vodafone Idea reportedly approached the DoT to obtain bank guarantees of Rs 15,000 crore, held against the telco's adjusted gross revenue dues. Vodafone Idea reportedly argued that the government’s relief package has allowed the company to pay its AGR dues after four years and also secure the repayment through an option to convert the principal due amount into further government equity in the company, there was no need to keep holding onto the bank guarantees.