Birla’s appeal through a letter to Cabinet Secretary Rajiv Gauba on June 7 reflects a last-ditch effort by the Indian conglomerate – which holds around 27% stake in VIL (UK’s). Vodafone Plc Holds approximately 44% – to salvage the company before possible default on statutory payments and bank dues.
Government sources, however, said that not much can be done for the company immediately as telecom companies have already been given relief in the form of spectrum payment obligations as well as AGR dues. No relief for any particular entity seems practical, although the government is still working on ways to ensure that “three private telcos” are operating in the country, the other two being Mukesh Ambani’s. Reliance Jio and Sunil Bharti Mittal Airtel, the sources added.
However, Vodafone Idea appeared to be in deep trouble and problems for the company – created by the merger of Birla-controlled Idea Cellular and Vodafone’s India subsidiary in 2018 – are far from resolved. The company’s outstanding debt, which has moved to the third position after being at the top, was estimated at Rs 1.8 lakh crore at the end of March 2021 (see graphic).
“With a sense of duty towards the 27 crore Indians associated with Vodafone Idea, I am ready to hand over my stake in the company to any entity – Public Sector / Government / Domestic Financial Entity or any other entity that the Government may consider. . The company deserves to be kept as an ongoing concern,” Birla said in the letter, where he appealed “to save the company and strengthen it in the national interest without our personal interest.”
In his letter, Birla said the company is trying to raise Rs 25,000 crore through “mostly non-Chinese” investors, but the latter has a “clear government intent for the three-player telecom market (in line with its public)”. want to see. stance) through affirmative actions on long-standing requests such as clarity on AGR liability, substantial moratorium on spectrum payments, most importantly, a floor pricing arrangement above the cost of service. ”
“In the absence of definite steps in this regard, it is understandable for potential investors to hesitate to invest. I would like to emphasize that without immediate active support from the government on these three issues (certainly by July ’21), the financial condition of VIL will take its operations to an irreversible point of collapse,” Birla said. Said in his letter to. White scheduled caste has refused to give any specific review on the issue of AGR payment in its hearing on July 23, the floor price matter is pending with the regulator Male With no progress for more than a year.
.