Global Statistics

All countries
193,209,767
Confirmed
Updated on 22/07/2021 8:41 pm
All countries
173,847,083
Recovered
Updated on 22/07/2021 8:41 pm
All countries
4,147,578
Deaths
Updated on 22/07/2021 8:41 pm

Global Statistics

All countries
193,209,767
Confirmed
Updated on 22/07/2021 8:41 pm
All countries
173,847,083
Recovered
Updated on 22/07/2021 8:41 pm
All countries
4,147,578
Deaths
Updated on 22/07/2021 8:41 pm

Liquidity-strapped Vodafone idea gets nod for FDI of up to 15 billion rupees

The liquidity-strapped telecommunications company Vodafone Idea’s proposal for an investment of up to 15 billion rupees through foreign direct investment (FDI) has been approved by the Union government, according to officials. A high-level group, made up of representatives from the ministries of the interior, foreign affairs, finance, and trade and industry, made the decision.

The go-ahead, which is an enabling provision, would help the financially distressed business raise funds to pay some of its adjusted gross income (AGR) fees, reduce debt, and use the money for operating expenses. This comes at a time when the company has approached the government seeking relief in paying certain fees. An official from the Department of Telecommunications (DoT) said it is a measure that indicates that the government does not want Vodafone Idea to go under.

Vodafone Idea shares ended the day 2.8 percent higher at Rs 9.25 on the BSE.

The company did not respond to inquiries. But, last September, he had said in a regulatory filing that the company’s board of directors had approved the raising of Rs 15,000 crore each through the issuance of shares of various forms and debt, with the aggregate total amount not exceeding of Rs 25,000 crore.

Stuck with Rs 1.8 trillion in debt (including deferred spectrum payment obligations of Rs 96,270 crore, AGR liability of Rs 60,960 crore and loans of Rs 23,080 crore), as the March 31, 2021, Vodafone Idea had recently asked the government for a one-year moratorium to clear the spectrum facility of more than Rs 8,200 crore payable in April 2022. During a Supreme Court hearing, it cited the hefty payment of AGR and the accrued fees due to your inability to make the payment. He had also mentioned the challenges he faced in fundraising, as investors were wary of low consumer fees and the resulting poor health of telcos. The company was arguing its case in court that the AGR fees calculated by the DoT were much higher than they should have been.

UK telecoms major Vodafone has been in the middle of a tax dispute with the Indian government for a long time. This dates back to Vodafone buying Hutchison Whampoa’s controlling stake in Hutchison Essar for $ 11 billion in 2007, and the Income Tax Department served a notice to the UK telecommunications company for failing to deduct a tax from retention. A retroactive tax of Rs 22,100 crore was imposed on Vodafone plc. Last September, Vodafone won the arbitration in The Hague and the court ruled that India’s imposition of the tax liability was a violation of the bilateral investment treaty between India and the Netherlands. Earlier this year, India appealed against the verdict.

Vodafone Idea reduced its net loss by 39.5 percent year-on-year in the fourth quarter of fiscal 21 to Rs 7,022 crore due to lower operating and exceptional expenses. In the same quarter of the previous year, it had posted a net loss of Rs 11,643 million.

The Supreme Court had given telcos last September 10 years for the phased payment of AGR money while reaffirming the fees collected by DoT. But earlier this year, Bharti Airtel and Vodafone Idea had moved SC pointing out anomalies in the calculation of the total AGR quotas which stood at Rs 43,000 crore for Bharti Airtel and Rs 58,000 crore for Vodafone Idea.

On July 19, SC reserved the order on the petitions of Bharti Airtel and Vodafone Idea seeking the correction of errors in the AGR demands by the DoT.

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