New Delhi: India’s third-largest telecom operator, Vodafone Idea (Vi), has moved the Supreme Court for a debt relief of more than $5 billion it owes the government, according to documents scrutinised by Reuters.
The company owes almost Rs.2.1 lakh crore in debt, with its revenue remaining stagnant and costs rising dramatically due to intense competition in the telecom sector.
The Department of Telecommunications (DoT) rejected Vodafone Idea CEO Akshaya Moondra’s request for a debt relief amounting to almost $9.46 billion, on April 29.
The government has already converted a part of the company’s debt into equity, amounting to a 49% stake, eventually becoming the single largest shareholder in the company. However, the government had clarified that it will continue to act as a ‘public shareholder’ in the company without any active role in the functioning of the company.
The company has been unable to raise debt since 2019 and is dependent on equity infusions to continue its operations.
“It is humbly submitted that without bank funding, the Petitioner company (Vodafone Idea) will not be able to operate beyond FY 2025–26, as it does not have the ability to pay AGR instalment of Rs 18,000 crore as per DoT demands,” the Vi petition stated.
Vodafone Idea is finding it extremely difficult to sustain its operations as its subscriber base is consistently shrinking while the telecom industry is seeing another wave of consolidation as the market gets saturated with limited scope of growth.
Disclaimer: This article is for informational purposes only and does not constitute financial advice. The views mentioned here do not reflect the publication’s views.
