Vodafone Group Plc might invest Rs 285 crore in Vodafone Idea. The investment in Vodafone Idea will be made as per the terms of the agreement made with Idea Cellular back in 2018. It is expected that Vodafone Group Plc will invest the amount by September. Since the telco giant is facing financial distress to generate cash and clear off its financial liabilities, investment by Vodafone Group Plc will aid Vodafone Idea in maintaining cash liquidity and financial position. This news is reported by ET Telecom.
Investment by Vodafone Group Will Aid Telco to meet its Operational Expenditure
Vodafone Idea is already facing the burden of massive AGR dues. The telco has to approximately pay Rs 58,254 crore to the government towards AGR dues. Vodafone Idea has just cleared three instalments of the AGR dues which is worth Rs 6,584 crore. Another plunge of investment by Vodafone Group Plc will help the telco to meet its operating expenses and maintain financial stability.
Vodafone Group has Already Transferred $200 Million to Vodafone Idea
Vodafone Group has already transferred $200 Million to Vodafone Idea in April. Since the spread of Covid-19 was increasing, Vodafone Idea was facing massive financial distress as the government imposed a lockdown period to combat the deadly virus. The payment by Vodafone Group was made under the contingent liability clause (CLC) which was signed by the telcos at the time of the merger between Vodafone and Idea and the payment was due in September 2020. The investment was made by Vodafone Group to help Vodafone Idea with financial liquidity amid the lockdown period.
Vodafone Group Can Potentially Invest up to Rs 8,400 Crore in Vodafone Idea
The Vodafone Group, Idea Cellular and Aditya Birla Group had already discussed the terms of the investment and reimbursement. Vodafone Group has the potential of investing a maximum amount of Rs 8,400 crore in Vodafone Idea which would help the telco in future. Since Vodafone Idea is already under tremendous financial burden due to massive AGR dues, the group has shown its concerns regarding the financial position of the telco giant. Also, the investment is made with the motive of reviving Vodafone Idea from a cash crunch situation.