Troubled telecom operator Vodafone Idea has reportedly sought time till the end of December to clear its remaining statutory dues, saying it hopes to close its fundraising from banks and third-party investors in the near future.
The Economic Times has reported that Vi reiterated that its promoters are "committed" to supporting the loss-making telecom service provider.
Vodafone Idea had cited continuing liquidity challenges due to its delayed fundraising, while replying to a Department of Telecommunications (DoT) show-cause notice (SCN). The DoT on July 21 sent a letter to the cash-strapped company for coming up short on payments of licence fees and spectrum usage charges.
Moneycontrol could not independently verify the report
On July 28, the mobile services provider, which has been haemorrhaging subscribers, requested time till the quarter ending December to pay the remaining 50 percent and 90 percent licence fees and SUC for the March quarter of FY23 and June quarter of FY24, respectively.
Vi ended FY23 with Rs 2.09 lakh crore of net debt and a cash balance of Rs 230 crore. As per company data, its debt to banks and financial institutions stood at Rs 11,390 crore in the March quarter. Of this, Rs 8,380.4 crore is payable by March 31, 2024.
Also Read: Vodafone reports better revenue growth, appoints Luka Mucic as CFO
In its letter to the telecom department, the company said it was working in a focused manner to secure funds from banks and third parties and its promoters, too, are committed to supporting the company as indicated to the government earlier, the report said.
Vi said it’s hopeful of closing out its fundraising process in the near future, enabling it to clear outstanding payments to DoT. The fundraising got delayed as current lenders as well as potential third-party equity investors want Vi's promoters to bring in promised funds first.
Jio, Airtel and Vodafone Idea have a revenue market share of 44 percent, 39 percent and 17 percent, respectively. Vodafone Idea had around 19.3 percent revenue share a year earlier.
The government, which holds a 33.1 percent stake in the telco through the conversion of statutory dues into equity, has in the past accommodated the company's requests for delayed payments.
Goldman Sachs recently estimated that in the absence of early tariff hikes, Vi would require $8-10 billion of fresh capital over the next two years to have a comparable mobile broadband network to effectively compete with Bharti Airtel and Reliance Jio.
At 9.44 am, the share was trading at Rs 8.25 on NSE, up 0.61 percent from the previous close.
Disclosure: Moneycontrol is a part of the Network18 group. Network18 is controlled by Independent Media Trust, of which Reliance Industries is the sole beneficiary.
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