Bharti Infratel's move to extend the deadline for the merger with Indus Towers by over two months till August 31 will now impact Vodafone Idea's capability to raise funds to clear a part of AGR-related dues. Currently, Vodafone Idea has just paid 13% of the total outstanding AGR dues.
Bharti Infratel, in a regulatory filing, had said that its Board of Directors reviewed the status of the scheme of arrangement between Indus Towers and Bharti Infratel and extended the long stop-gap date of the proposed merger to 31 August 2020.
“Since the conditions precedent to be fulfilled for the scheme to become effective cannot be completed by the extended-Long Stop Date, i.e., June 24, 2020, the Board of Directors have further extended the Long Stop Date till August 31, 2020, subject to agreement on closing adjustments and other conditions precedent for closing, with each party retaining the right to terminate and withdraw the scheme,” Bharti Infratel said in its regulatory filing earlier this week.
Vodafone Idea was looking to raise Rs 6,500 crore
Vodafone Idea was looking to clear a part of AGR-related dues through by selling 11.15% stake in Indus Towers after the merger with Bharti Infratel. The telco was looking to raise Rs 6,500 crore by selling its stake in Indus Tower. However, the valuation has now plunged to Rs 4700 crore.
In the last Supreme Court hearing, Vodafone Idea said that it has not made profits for several quarters, and has no funds to make payments towards the AGR-related dues. The telco’s also refused to provide any bank guarantees. Vodafone Idea has also warned that it will “go bust” if it is made to pay AGR dues in one shot. The telco has already paid nearly Rs 7,000 crore and had informed the Court that its licenses and spectrum can be used as security against AGR dues. Vodafone Idea owes Rs 58,254 crore or $7.6 billion towards AGR-related dues.
Vodafone Idea will require a combination of additional tariff hikes, equity infusion, tower monetisation, and rationalisation of levies to be able to repay its AGR dues, Citi Research said in its recent note, said.