Vodafone Idea Seeks Release of ₹15,000 Crore Bank Guarantees

Vodafone Idea is reportedly urging the Department of Telecom (DoT) to release ₹15,000 crore in bank guarantees, aligning with its fundraising agenda. The telco’s board of directors is set to convene on March 3 to deliberate on fundraising strategies.

Rationale Behind the Request

Citing the deferment of adjusted gross revenue (AGR) and spectrum dues by four years and the government’s option to convert these dues into equity, Vodafone Idea argues against withholding the bank guarantees. With the AGR and spectrum dues now deferred, the telco contends that there is no justification for retaining the bank guarantees associated with these dues.

Current Scenario

As of now, the Department of Telecom reportedly holds ₹15,000 crore in bank guarantees related to Vodafone Idea’s AGR and spectrum dues, which amount to ₹50,339 crore.

Vodafone Idea’s Position

Vodafone Idea asserts the necessity of releasing the bank guarantees, emphasizing the deferred nature of the AGR dues. Additionally, the telco seeks to fix the calculation date for AGR dues as the date of the Supreme Court’s judgment on the matter.

Implications for Vodafone Idea

The release of ₹15,000 crore bank guarantees would alleviate some financial strain on Vodafone Idea’s balance sheet, crucial for its fundraising endeavors. With reports suggesting its parent company, Vodafone Group Plc., is divesting stakes in Indus Towers to inject funds, Vodafone Idea is under pressure to secure essential investments.

Ongoing Developments

While Vodafone has divested a portion of its stake in Indus Towers, no concrete steps have been taken yet regarding the infusion of funds into Vodafone Idea. The upcoming board meeting on March 3 is expected to shed light on the telco’s fundraising strategies and potential investors.

Business Insider has reached out to Vodafone Idea for comments on the matter and awaits their response for further updates.