Vodafone Idea exercises the option to postpone paying its Rs 8,837 crore additional AGR liability

23 Jun 2022 , 11:17 AM

Debt-ridden The telecom company Vodafone Idea has made the decision to postpone for four years the payment of additional adjusted gross revenues totalling Rs 8,837 crore.

The DoT upped its adjusted gross revenue (AGR) demand on June 15 for an additional two financial years beyond 2016—17, which were not covered by the Supreme Court’s judgment on statutory dues, according to the firm in a late-night filing on June 22.

In the filing, Vodafone Idea (VIL) stated that its board of directors “, in compliance with the aforementioned DoT Letter, has approved the use of the option to defer paying the AGR-related dues for a period of four years with immediate effect. According to the aforementioned DoT Letter, the amount of the AGR-related dues is R 8,837 crores, however, this figure is susceptible to change due to the resolution of various representations “.

Based on their AGR, which is taken into account to have been earned by them from the sale of services,  government’s share from their revenues is calculated.

According to a VIL filing, the DoT has given the company a four-year moratorium on any AGR-related debts up to the financial year 2018—19 that were not covered by the Supreme Court’s judgment dated September 1, 2022, and that can be exercised within a 15-day window by June 30.

The company stated that the new demand of Rs 8,837 crore is subject to revision due to the resolution of various representations, the CAG, special audit, and any other litigation outcomes. The company further stated that the final amount is to be paid in six equal annual instalments beginning on March 31, 2026, following the end of the moratorium period.

The request by Vodafone Idea to convert over Rs16,000 crore in interest payments owed from a prior AGR moratorium into approximately 33% of the firm has already been accepted by the government.

In terms of adjusted gross revenue up to the financial year 2018—19, telecom providers owe the government more than Rs 1.65 lakh crore. According to a recent assessment, the AGR liability for Bharti Airtel, Vodafone Idea, Reliance Jio, BSNL, and MTNL up to the financial year 2018—19 was Rs 31,280 crore, Rs 59,236.63 crore, Rs 631 crore, and Rs 5,009.1 crore.

In a separate filing, the business stated that the board of directors had authorized financing Rs 436.21 crore from Vodafone Group company Euro Pacific Securities by the issuance of preferred shares at a unit price of Rs10.2 each or warrants at the same price.