Indus Towers, a major telecom tower company, is putting pressure on Vodafone Idea (Vi) to pay its past dues and has ruled out any further leniency in the payment plan that was agreed upon earlier this year. Despite Vi's improvement in clearing 90-100% of its current dues, Indus is closely monitoring the telco's payment patterns and funding situation to recover its accumulated past dues as per the agreed schedule, said an ET report.
During Indus' fourth quarter earnings call on Thursday, the company's top management stated that Vi has begun clearing 90-100% of its current dues. However, Indus will be monitoring the telco's payment patterns and funding situation to recover its accumulated past dues according to the agreed-upon schedule. Indus has indicated that it will not reduce its services or restrict Vi's access to its towers as long as the telco pays its current dues on a regular basis.
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Vikas Poddar, CFO of Indus Towers, stated during the earnings call that "there will be no fresh payment plan for them in FY24, and we are in active talks with the client to clear the past outstandings."
Vi has committed to paying 100% of its current dues to Indus starting in January 2023 under the current payment plan. It will also pay its past accumulated outstandings as of December 31, 2022, over a seven-month period beginning in January as part of the agreed-upon higher payment plan.
Vi, however, had cited challenges in complying with the higher payment plan in the third quarter of FY23. The telco's efforts to raise approximately Rs 20,000 crore through a combination of debt and equity have been unsuccessful for over a year.
Poddar added that "there may be some challenges, but we are working with Vi and hope to solve the issue as per the agreed payment plan."
Vi accounts for over 40% of Indus' revenue, making the health of the loss-making telco crucial for Indus' long-term financial stability. Vi's total dues to Indus are estimated to be around Rs 7,000 crore.
Indus' management stated separately that the tower company will consider dividend payouts only when the working capital situation is more comfortable. Poddar stated that "any dividend distribution can be considered only once the stress levels in the working capital situation ease."
