Amid concerns around how telecom operator Vodafone Idea (VIL) will cope with the Supreme Court ruling on adjusted gross revenue (AGR) payments, the company and its UK based JV partner Vodafone Group issued separate statements to assuage investor concerns. There have been rising concerns that the UK based Vodafone Group would exit the Indian telecom joint venture, according to some reports.
“Vodafone is aware of the unfounded and baseless rumours circulating in some of the Indian media that we have decided to exit the (India) market. We would like to categorically state that this is not true and is malicious,"said Vodafone Group in a statement.
The statement further noted that Vodafone is actively engaging with government and they are fully supportive of their local management as they continue to manage the joint venture (with Aditya Birla Group) in these challenging times.
In response to the same queries, VIL issued a statement to the exchanges stating "As regards exit of India operations by Vodafone Group is concerned, we wish to inform you that the Company (VIL) is not aware about anything on the subject as it pertains to Vodafone Group and hence cannot comment on the same."
Vodafone Group has struggled to keep its losses in check over the past year with VIL only adding to the burden since merger last year.
VIL had already issued a statement to deny reports that the company had approached lenders for a debt recast.
" We categorically deny and dismiss this as baseless and factually incorrect. We have not made any request for debt recast to any lender or asked for reworking of payment terms. We continue to pay all our debts as and when these fall due,"informed the company.
Rating agency CARE has downgraded its rating on VIL's long-term loans and debentures from “A” to “A-” and also paced the rating under watch with negative implications.
The revision in long-term ratings factors in the Supreme Court’s (SC’s) recent ruling that telecom players have to include non-core revenues in their AGR to calculate their license fee dues. Based on the court order, the Department of Telecommunications (DoT) can now raise its demand from VIL to Rs 28,309 crore. The company has to comply with the SC order within three months.
Analysts expect this payment to put VIL on an extremely weak footing compared to its telecom rivals due to mounting subscriber losses and integration hurdles.