Shares of Vodafone Idea (Vi) rallied 14.20% in today’s trade after the Supreme Court said that the government, which has 49% of shareholding, is free to consider relief on both additional and reassessment of the AGR dues.
The company, in its exchange filing attached the order from the apex court, which mentioned that as the large stake of the Union of India in Vi, the issue of AGR dues would have a direct bearing on the interests of 20 crore customers, therefore, “that there shall be no impediment in the Union of India reconsidering the issue and taking an appropriate decision in accordance with law.”
In the meanwhile, several media reports suggested that the PE firm Tillman Global Holdings (TGH) is in talks to invest $4to $6 billion in Vodafone Idea and take operational control of the loss-making telecom operator. The potential investment is dependent on the government giving a comprehensive relief package that addresses all of Vi’s liabilities, including AGR-related dues and spectrum payments.
Responding to the clarification regarding the same, Vi stated that it keeps exploring various opportunities and options to raise funds within the authorizations given by the board. “As and when such proposals are considered by the Board of Directors of the Company that warrant disclosures, the Company complies with the disclosure obligations under the Sebi being considered by the Board that requires disclosure as reported by the media.”
Vodafone Idea’s troublesome history:
Vodafone Idea currently has an outstanding AGR debt of approximately ₹83,400 crore owed to the government, with annual repayments of ₹18,000 crore set to begin in March. When including penalties and interest, its total governmental liabilities are estimated to reach around ₹2 trillion.
The company has previously indicated that its cash flow is inadequate to meet these longstanding dues. In August, Vodafone Idea’s former CEO Akshaya Moondra said that resolving the AGR dispute quickly was essential for the telecom operator to obtain funding from banks.
Shares of the telecom company closed today’s session at Rs 9.58, up by nearly 10%.