The incumbent telecom firms should be prepared for the worst case scenario on the issue of Adjusted Gross Revenue (AGR); though they can still file a curative petition, the probability of resolution remains bleak.
“Though they can still file a curative petition, the probability of resolution remains bleak,” a report by ICICI Securities said.
Bharti Airtel has already raised capital of $3 billion, which should help it meet the burden. But the same remains a Herculean challenge for Vodafone Idea Ltd, a challenge that cannot be resolved without government intervention, the report said.
“VIL promoters, Vodafone Plc and Aditya Birla Group, have already mentioned that if the entire AGR liability has to be paid, they will have to shut shop. We don’t see the situation for VIL being salvaged without government intervention,” it said.
“Apart from other stakeholders in VIL, the government, too, could be one of the most impacted parties if the company shuts down as it is owed Rs 90,000 crore in deferred spectrum dues, besides the AGR liability. We also see an indirect impact on PSU banks, if VIL fails to cough up the money,” it added.
The Supreme Court has dismissed the review petition filed by the telcos on its AGR ruling, which means the order of October 24, 2019, continues to hold good.
Bharti Airtel and Vodafone Idea have disclosed their potential AGR liabilities at Rs 343,00 crore and Rs 442,00 crore respectively, which have to be paid by January 23, it said.
Also read: All you wanted to know about AGR
Also read: Adjusted Gross Revenue: SC ruling deals Rs 70,000 cr blow to Airtel, Vodafone Idea
Source: The Hindu
