The company's independent auditor's review report to board of directors said, during the quarter ended June 30, 2020, based on the Supreme Court judgment of July 20, 2020, the Company has further provided Rs19,440.5cr and its entire net worth is eroded as of June 30, 2020. Further, owing to its financial performance and financial condition, the company has breached its debt covenants as of March 31, 2020, for which it is in discussions with various lenders.
According to the regulatory filing, on July 20, 2020, the apex court had reserved its order on the aspects of the time frame for the mode of recovery of the AGR dues and how to secure the dues.
Thereby, Vodafone Idea in the financial statement said, "during this quarter, on prudence, we have recognized a charge of Rs19,440cr as an exceptional item towards the total estimated AGR liability, in addition to estimated recognized liability of Rs46,000cr as on March 31, 2020."
Further, the telco added, "We have also classified Rs14,280cr from ‘non-current’ to ‘current maturities of long term debt’ for not meeting certain covenant clauses under the financial agreements for specified financial ratios as at March 31, 2020. We have exchanged correspondences/been in discussions with these lenders for the next steps/waivers. Of the above, during the quarter, we have received waivers for borrowings amounting to Rs4,500cr."
Vodafone Idea said, "It is to be noted that our ability to continue as going concern is essentially dependent on a positive outcome with regard to the timeframe for the payment of AGR dues to be made in instalments and successful negotiations with lenders. Pending the outcome of the above matters, these consolidated financial results have been prepared on a going concern basis."
Meanwhile, Vodafone Idea states that they continue to actively engage with the Government to provide relief on various industry related concerns. Separately, the Telecom Regulatory Authority of India (TRAI) has initiated a consultation on floor pricing at the request of all the operators, through COAI.
On Friday, Vodafone Idea stock will be in focus following the announcement of Q1 result and AGR payment. In the previous closing, the telco's stock ended at Rs8.25 per piece down 0.72%.