Vodafone Group Plc is considering a proposal to strengthen the balance sheet of its Indian telecom joint venture Vodafone Idea Ltd. as the company seeks fresh funding and attempts to revive its operations, according to a Bloomberg report citing people familiar with the matter.
The report said the UK-based telecom major, which currently owns about 19% in Vodafone Idea, is evaluating a plan to transfer part of its stake in the Indian telecom operator to the company itself to hold as treasury shares.
According to the people cited in the report, the proposed transfer would serve as an alternative to Vodafone directly injecting fresh capital into the struggling telecom operator.
The move is aimed at improving Vodafone Idea's financial position and supporting its ongoing efforts to raise debt from lenders.
Sources told Bloomberg that Vodafone Idea could later monetise the treasury shares through stake sales, enabling the company to raise additional capital for payment of government dues and future business expansion.
This follows a significant development on the regulatory front. The company recently informed exchanges that the Department of Telecommunications (DoT) has finalised Vodafone Idea's adjusted gross revenue (AGR) dues at Rs 64,046 crore as of December 31, bringing long-awaited clarity to a major liability overhang.
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This marks a crucial step in resolving one of the biggest uncertainties for the telecom operator, which has been grappling with heavy statutory dues since the Supreme Court of India ruling on AGR in 2020.
Under the approved framework, Vodafone Idea will begin repayments with a minimum annual payment of Rs 100 crore between fiscal year 2032 and fiscal 2035, followed by a sharper repayment phase.
From fiscal 2036 to fiscal 2041, the company will clear the remaining dues through six equal annual instalments of Rs 10,608 crore each.
Separately, AGR dues amounting to Rs 124 crore for fiscal year 2018 and fiscal year 2019, which were not part of the reassessment, will be paid between March 2026 and March 2031.
The clarity on dues follows the government's relief measures in December, when it froze AGR liabilities worth Rs 87,685 crore for the period fiscal year 2007 to fiscal 2019, in line with court directions. These frozen dues remain subject to reassessment.
Importantly, the freeze excludes dues for fiscal 2018 and fiscal 2019, which had already been finalised by the Supreme Court and therefore remain payable.
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