Vodafone Idea | Representative image
Vodafone Idea cellular (Vi) on August 14 reported a loss of Rs 7,319.1 crore for first quarter of FY 2021-22. It also reported its total debt standing at Rs 1.91 lakh crore.
This comprise deferred spectrum payment obligations of Rs 1,060.1 billion and AGR liability of Rs 621.8 billion that are due to the government and debt from banks and financial institutions of Rs 234.0 billion. Cash and cash equivalents were Rs 9.2 billion and net debt stood at Rs 1,906.7 billion.
Vi in its quarterly report (April-June 2021) stated that the revenue declined by 4.7 percent QoQ to Rs 91.5 billion on account of slowdown in economic activities due to lockdown/restrictions in several districts during the severe second wave of COVID-19. On a reported basis, EBITDA for the quarter was Rs. 37.1 billion, with EBITDA margins at 40.5 percent vs 45.9 percent in Q4FY21, said the firm. However, its net worth stands at negative Rs 455,409 million.
“The severe second wave of COVID caused significant disruptions and slowdown in economic activities. During these challenging times, VIL continued to serve its customers and community at large by providing seamless connectivity as well as maintaining superior quality of services. Vi GIGAnet’s superior network experience on both data and voice, is testified through top rankings in independent external reports. We continue to focus on executing our strategy to keep our customers ahead, and our cost optimization plan remains on track to deliver the targeted savings. We are in active discussion with potential investors for fund raising, to achieve our strategic intent,” Vodafone Idea Limited’s MD and CEO Ravinder Takkar said.
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The private cellular firm reported that as of June 30, 2021, an amount of Rs 79,499 million has been classified from non-current borrowings to the current maturities of long term debt for non meeting certain covenant clauses under the financial agreement for specified financial rations.
According to the firm, Vi’s existing debt payable by June 30, 2022 — excluding deferred spectrum obligation — stands at Rs 86,417 million. The firm had written to the Department of Telecommunications for deferment of the spectrum payment instalment of Rs 82,117 million, which is payable as at April 9, 2022.
Vi’s strong data volume growth of 13.2 percent QoQ reflects robust consumer engagement. The firm said that its continued network capacity expansion supported by spectrum refarming and network upgrade to 4G resulted in this growth.
The cellular company cited Vi GIGAnet, through which it continues to offer superior network experience on both, data and voice, as reflected in independent external reports for its improved performance.
However, it maintained that cost optimisation is underway with target to achieve Rs 40 billion annualised opex savings by December 2021, out of which they have achieved almost 70 percent of targeted opex efficiency on run rate basis.
Among other details, the firm informed that apart from paying the next instalment of AGR liability, it also needs to provide bank guarantees of Rs 9,757 million to avail additional moratorium of one year on spectrum instalments for November 2022, February 2014 and October 2016 auctions amounting to Rs 64,392 million.
“Guarantees amounting to Rs 133,580 million are due to expire during the next twelve months. The Board of Directors of the company, at its meeting held on 4th September, 2020 had approved the fund raising plan of up to Rs 250,000 million,” the Vi statement said.
The Supreme Court had dismissed the modification application filed by the Vi and other telecom operators for correction of the manifest/clerical/arithmetic errors in AGR calculation. Subsequently, the company has filed a review petition on August 11 with the apex court on the AGR verdict and called for the correction of “arithmetic errors” in the computation of AGR dues.
The Supreme Court had rejected petitions by telecom companies, including Vodafone Idea and Bharti Airtel, for rectification of alleged errors in the calculation of adjusted gross revenue (AGR) related dues payable by them.
Recently, billionaire Kumar Mangalam Birla recently stepped down as chairman of Vodafone Idea Ltd, within two months of offering to hand over the Aditya Birla Group’s stake in the debt-laden telco to the government.
Vodafone Idea (VIL) had an AGR liability of Rs 58,254 crore, of which it has paid Rs 7,854.3 crore and Rs 50,399.6 crore is outstanding. VIL’s gross debt, excluding lease liabilities, stood at Rs 1,80,310 crore as of March 31, 2021.
The amount included deferred spectrum payment obligations of Rs 96,270 crore and a debt of Rs 23,080 crore from banks and financial institutions, apart from the AGR liability.