Vodafone Idea is in a serious financial crunch, raising concerns about its ability to continue as a going concern. The company has also recently admitted the same in a statement regarding its viability, stating ‘Material Uncertainty Related to Going Concern’. With its inability to raise funds and the impact on its cash flows due to the poor financial performance of the company, stakeholders are plagued with doubts about the company’s ability to service its debt, adjusted gross revenue (AGR) and spectrum dues.

Sources in the lending community have told CNBC-TV18 that the company’s financial results are a far cry from sound levels. Purely on the basis of the operational performance, financial charges have been on the rise for the company and some of the payments, dues to the government in this particular calendar year could also be a challenge, going forward.

The company’s net debt at the end of FY21 stood at USD 1.8 billion. Other than this, the company also has liabilities close to Rs 30, 000 crore owed to banks and financial institutions; spectrum dues owed to the tune of Rs 94, 200 crore and total AGR dues as assessed by the DoT at around Rs 58,254 crore. Around Rs 7,854 crore of the total AGR dues has already been paid by the company.

The lenders have told CNBC-TV18 that they have written to the Ministry of Finance, asking them to reconsider the computation of the adjusted gross revenue (AGR) dues that the company has been looking at and contesting. They have said that if the AGR dues computation issue is resolved then the company can be viable again and service its debt.

However, on the other hand, the investor community shared that if there is government support and if there is equity infusion from the promoters, then they will be more comfortable in investing in this company.

Watch the accompanying video of CNBC-TV18’s Nisha Poddar for more details.

(Edited by : Dipika Ghosh)

First Published:Jul 1, 2021 10:55 AM IST