DoT Should Not Invoke Bank Guarantees: Vodafone Idea Lenders

Earlier this weekend, lenders of Vodafone Idea met with Department of Telecommunications (DoT) and stated that invoking bank guarantees will lead to defaults as the telco giant is not in the position to repay dues to the bank. Lenders also requested DoT to come up with a solution which would ensure the operations of the three-player telecom market. According to an official “Lenders have already addressed the government about the stressed situation as the telco giant is already facing trouble under asset quality. If the default happens by Vodafone Idea, it will require bank guarantees payments to DoT along with additional burden on provisioning”. Bankers have asked the government to find a viable solution and encourage three-telco model.

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Vodafone Idea Owes Rs 57,000 Crore to DoT

Lenders addressed the DoT and noted that bank guarantees support approximately Rs 57,000 crore dues. If the guarantees are invoked, banks will pay the amount to the government on behalf of the company. However, Vodafone Idea marked that they will close down if the DoT invokes bank guarantees and no relief measures are provided on AGR dues.

As per the reports of ET, Vodafone Idea has only paid Rs 3,500 crore to DoT, and its self-assessment of AGR dues stands at Rs 23,000 crore out of which principal amount stands at Rs 7,000 crore. Experts have warned that telco will face trouble paying their self-assessed dues in a short period.

Vodafone Idea’s Debt Estimated Around Rs 1.26 Lakh Crore