One of the major hurdles that the large telecom companies of India, especially Bharti Airtel and Vodafone Idea have been facing is the imminent deadline of paying Adjusted Gross Revenue (AGR) dues. For Bharti Airtel, these dues run up to Rs 35,000 crore. However, the deadline has been currently extended on account of the hearing that is to be held in the Supreme Court. Now, because of these pending dues, there were doubts about the ability of Bharti Airtel to continue as a going concern. But, as per a new ET report on the matter, the new rights issue via which Bharti Airtel has raised $3 billion will help the telecom operator in averting the situation.
Convertible Bonds and Shares Come to Airtel’s Rescue
Bharti Airtel has raised money through shares and convertible bonds, and this has helped the telecom operator in reducing the “level of uncertainty” for paying the AGR dues to the Department of Telecommunications (DoT). The dues which are to be paid to the DoT are on account of Spectrum Usage Charged (SUC), license fees, interests and penalties. While the decision from the Supreme Court came, Bharti Airtel posted a loss of Rs 23,000 crore in the particular quarter, this raised questions in the telco’s ability to continue as going concern.
Bharti Airtel Files Modification Petition
Bharti Airtel has been taking steps to seek relief on the dues which it has to pay. Firstly, the telecom operator filed a review petition in the Supreme Court to seek relief on order. However, the petition was dismissed by the SC. Now, the telecom operator has filed a modification petition in the apex court to seek if it can get to negotiate the terms of the payment, like payment deadlines and other details with the Department of Telecommunications (DoT) itself. It is worth noting that other telcos, Vodafone Idea and Tata Teleservices have also filed petitions in the SC.
The deadline for the payment of AGR dues has lapsed on January 23, and Reliance Jio is the only operator which paid its dues on time. But, with an internal order from the DoT, the department has decided not to take any coercive action on the telecom companies.