Vodafone Idea Approaches Supreme Court After Indian Government Rejects Dues Relief: Report

Indian telecom operator Vodafone Idea (Vi) has approached the Supreme Court of India challenging the government’s refusal to waive over USD 5 billion in interest and penalties on long-standing dues, according to court documents reviewed by Reuters.

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To SC: Vodafone Idea Seeks AGR Relief from Supreme Court, Cites Sector-Wide Crisis

No Waiver on Interest and Penalties

The move follows a letter dated April 29 from the Ministry of Communications, rejecting a request from Vodafone Idea CEO Akshaya Moondra to consider a waiver on interest and penalties it owes on USD 9.76 billion in dues, saying the survival of India’s third-largest telecom player was at risk, according to the letter, as mentioned in the report.

“The request cannot be considered,” the communications ministry wrote, as per the report.

To DoT: Vodafone Idea Says It Can’t Operate Beyond FY 2025–26 as Banks Refuse Loans

Vodafone Idea, a joint venture between UK-based Vodafone Group Plc and India’s Aditya Birla Group, owes the government USD 9.76 billion in dues, stemming from a 2019 Supreme Court ruling that widened the definition of adjusted gross revenue (AGR), significantly increasing the liabilities of telecom companies.

Financial Distress and Sectoral Implications

In its petition filed Thursday, Vodafone Idea urged the court to direct the government to act “in public interest,” given the “sensitive telecom sector”. The plea, not yet made public, argues that without relief, the company would be unable to operate beyond the financial year 2026.

The telecom operator’s net debt stood at USD 25 billion as of September 2023, according to brokerage firm CLSA.