Vodafone Idea Limited (VIL) spokesperson has confirmed that the company has paid the License Fee (LF) which was due for the first quarter of FY22. Several online reports that went live Thursday morning claimed that Vodafone Idea had fallen short of paying its LF dues for Q1 FY22. But the information was wrong since a spokesperson from the company has said that Vi has completely paid its LF dues for the concerned quarter. But this doesn’t mean the company’s financials are very good.
Vodafone Idea Still In Need of an Outside Investor
The company is still talking to potential investors. The government has asked Vi promoters including the Vodafone Group Plc and the Aditya Birla Group to share their plans for the company for the next two years. Before the relief package is offered to the industry, the government wants the promoters to show some intent and commitment by infusing further capital in the company.
It is worth noting that the promoters have already said no to this. Directly and indirectly, on multiple occasions, the promoters of Vi have refused to add any further capital to the company. Instead, they are ready to sell their stake to outside investors and get diluted.
It is a good thing that Vi has managed to pay its LF dues for the first quarter and not increase its debt with interest any further. But the telco still has to climb a mountain in terms of clearing its debt and Vi’s cash crunch won’t help. Vodafone Idea can’t just focus on debt and paying back to the government. The telco also needs to invest in its networks and with most of its cash going towards the payment of dues, it would be difficult for Vi to do so. Further, lenders wouldn’t be too excited to offer any more debt to Vi given the kind of risk that involves.