Vodafone Idea will Make Partial Payments to ATC

It doesn't look like that ATC is confident about the preferential bond issue by Vodafone Idea (Vi). The tower company has cautioned that the preferential bond issue by Vi is subject to conditions that may not be fulfilled. A key condition is for the government to convert the accrued interest dues worth Rs 16,310 crore into equity for itself in the Indian telco, which has not been talked about too much by the government as of now. 

Highlights

  • The tower company, in a recent filing at the United States Securities and Exchange Commission (SEC), said that Vi had shared intent to pay the full amount owed starting January 2023.
  • ATC has also mentioned that there are no assurances that this would really happen.
  • Vi has not paid roughly $48 million to ATC (Rs 391 crore approx), which has forced the tower company to defer recognition of revenue.

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Vodafone Idea

Vodafone Idea (Vi), the third-largest telecom operator in India, has indicated to the American Tower Company (ATC) that it will make partial payments owed under tenant leases for the remaining 2022, including the dues for September 2022 quarter. The tower company, in a recent filing at the United States Securities and Exchange Commission (SEC), said that Vi had shared intent to pay the full amount owed starting January 2023. However, ATC has also mentioned that there are no assurances that this would really happen. Vi has not paid roughly $48 million to ATC (Rs 391 crore approx), which has forced the tower company to defer recognition of revenue, said an ET report.

ATC Not Too Confident About Preferential Bond Issue by Vodafone Idea

It doesn't look like that ATC is confident about the preferential bond issue by Vodafone Idea (Vi). The tower company has cautioned that the preferential bond issue by Vi is subject to conditions that may not be fulfilled. A key condition is for the government to convert the accrued interest dues worth Rs 16,310 crore into equity for itself in the Indian telco, which has not been talked about too much by the government as of now.

Akshaya Moondra, CEO of Vodafone Idea, also said that the government had not communicated anything about the debt-to-equity conversion in the company since April 2022. Vi is the largest customer for ATC in India and accounted for 3% of its revenues for the first nine months of 2022. Vodafone Idea owes money to multiple vendors and tower companies. The telco needs to raise funds desperately to get some short-term relief and put the focus back on expanding business.

Vi wouldn't want to miss out on payment deadlines and be dragged to the insolvency court. However, the telco is stuck with the government not moving the needle around interest conversion into equity.

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