Vodafone Idea to Reallocate Rights Issue Funds for Paying AGR Dues

Rights Issue Money to be Reallocated

It was back in last March that Vodafone Idea allotted about 20 billion equity shares (prima facie value of Rs 10 with a premium of Rs 2.50) by way of a rights issue on May 4, 2019, to raise nearly Rs 25,000 crore. According to the initial plan that was charted by Vodafone Idea, a total of Rs 18,674.78 crore was to be used to repay the deferred payment liabilities to the Department of Telecommunications. This amount also included the said Rs 2,826.1 crore which was also to be paid to the DoT out of the total Rs 6,277.1 crore in deferred liabilities and this amount was payable by April 9, 2020.

The relief to the telecom companies came in the form of the payment moratorium of Rs 42,000 crore which eased the cash flow problem by a little for both the companies. The three private telecom operators in the industry, Vodafone Idea, Bharti Airtel and Reliance Jio, all benefited from it. Vodafone Idea said about this, “The DoT has now granted a two-year moratorium on deferred payment liabilities towards spectrum payments to telecom companies, and hence the amount of Rs 2,826.1 crores earlier earmarked for payment of deferred payment liabilities identified in the letter of offer need not be utilised for that purpose.”

Telcos Still in Search of Relief

Out of all the telecom operators in the industry, Vodafone Idea is the worst-hit one with the AGR dues. While the total dues on the telecom companies for this matter scale up to Rs 1.47 lakh crore, Vodafone Idea has to pay Rs 53,000 crore to the DoT. Bharti Airtel, on the other hand, has to pay Rs 35,500 crore to the DoT for the same reasons. Both the companies have separately filed for a review petition in the Supreme Court to seek some relief in this matter.