Voda Idea posts Rs 51k cr loss, highest ever by an Indian firm

09:38 AM Nov 15, 2019 | PTI |
New Delhi: Telecom operator Vodafone Idea on Thursday reported consolidated loss of Rs 50,921 crore - highest ever loss posted by any Indian corporate - for the second quarter ended September 30, on account of liability arising out of the Supreme Court order in the adjusted gross revenue case. The Supreme Court last month ruled in favour of the government and directed telecom companies, including Vodafone Idea, to pay dues as demanded by the Department of Telecom. Vodafone Idea said that now its ability to continue business will depend on reliefs sought from the government and positive outcome of the legal option it has. Vodafone Idea total loss stood at Rs 50,921 crore in September quarter, as against Rs 4,874 crore loss in the year-ago period. The company has estimated liability of Rs 44,150 crore post the apex court order, and made provisioning of Rs 25,680 crore in the second quarter this fiscal. The company also set aside Rs 4,822 crore for certain assets that it may not be able to use due to shifting of network from 3G to 4G technology. Vodafone Idea also derecognised the deferred tax assets amounting to Rs 13,940 crore recorded up to June 30, 2019. The revenue of the Vodafone Idea rose 42 per cent to Rs 11,146.4 crore during the second quarter this year from Rs 7,878.6 crore in the year-ago period. "We are in the process of filing a review petition...It is to be noted that our ability to continue as a going concern is dependent on obtaining the reliefs from the Government as discussed above and positive outcome of the proposed legal remedy," Vodafone Idea said in a statement. It said the company through Cellular Operators Association of India ('COAI') has made representations to the government to provide relief to the telecom sector. The relief request includes but not limited to request to not press for the AGR liability payment and grant waivers, not levy spectrum usage charges (SUC) on non-licensed revenue, reduction of license fee and SUC rates, use of GST credit for payment of government levies. The industry body has requested the government to allow payment to be made in installments after some moratorium and grant a moratorium of two years for the payment of spectrum dues beyond April 01, 2020 up to March 31, 2022. "The government has also taken cognizance of the financial stress on the telecom sector and has recently set-up a Committee of Secretaries to evaluate the telecom operators' plea and suggest measures to mitigate the financial stress," Vodafone Idea said. British telecom major Vodafone, which holds majority stake of 45.39 per cent in Vodafone Idea, on Tuesday made provision for the liability that arises as a result of SC order but capped group's exposure at Rs 8,400 crore. Aditya Birla Group holds 27.66 per cent stake in the joint venture, while close to 28 per cent stake is held by public shareholders. Vodafone CEO Nick Read has said the British telecom major will not inject any further equity into Vodafone Idea. As per internal estimates by the telecom department, Bharti Airtel faces a liability of around Rs 62,187 crore (including share of Tata Group of companies and Telenor India), while Vodafone Idea may have to pay about Rs 54,184 crore. The remaining liability is with state-owned BSNL/MTNL and some of the shut/bankrupt telecom companies. The SC has given three month time to telecom operators to clear unpaid dues to the government based on its judgement dated October 24, 2019. Vodafone Idea shares tanked to all time low of Rs 2.9 apiece before closing at Rs 2.95 at the BSE on Thursday.

Udayavani is now on Telegram. Click here to join our channel and stay updated with the latest news.