Vodafone Idea (Vi) will not opt for voluntary bankruptcy as the move may indicate the company is at fault, which is not the case, senior executives of the Aditya Birla Group (ABG) have said.

The executives of the beleaguered telecom giant have pinned the blame for multiple challenges on the lack of a level-playing field and regulatory regime and not on the management or operational failures, according to an Economic Times report on August 6.

With the ABG owning a 27.66 percent stake in Vi and Vodafone owning 44.39 percent, Kumar Mangalam Birla recently wrote a letter to the Centre asking them to take over the group’s stake to keep the company afloat. Meanwhile, his resignation from the post of non-executive chairman and director of Vi earlier this week citing no reason has raised eyebrows.

The company, which has been putting up a brave face, has acknowledged that its fate is now in the hands of the government. An internal communication sent by Vi’s Managing Director Ravinder Takkar to 9,500 employees said the firm would continue to receive “support and guidance” from him and ABG even after the resignation of Kumar Mangalam Birla. It added that the employees should continue to focus on customers and winning in the market. The internal communication was seen by The Economic Times.

Government officials told the business daily that the Centre cannot accept Vi’s proposal but is in the process of announcing a relief package for the telecom sector. The benefits may help Vi too.

The relief package for the telcos may include surrendering of the spectrum, reduction of bank guarantees, phasing out or reducing levies such as license fees and spectrum usage charges and prospectively redefining adjusted gross revenue (AGR) to exclude non-telecom items.

Vi is facing a shortfall of Rs 23,500 crore in cash flows with its March-end cash balance at Rs 350 crore. The company has been looking to raise funds of up to Rs 25,000 crore for the past 10 months but in vain.

Vi’s woes started after the Supreme Court ruling in September 2019 to widen the definition of AGR to include non-telecom items. This left Vi hanging with a statutory bill of over Rs 58,000 crore.

To make matters worse, its debt shot up to Rs 1.8 lakh crore in the January-March quarter as it borrowed to buy spectrum and invest in its network. Vi, a merger between Aditya Birla’s Idea Cellular and Vodafone, has never reported a quarterly profit since its merger.

(Edited by : Kanishka Sarkar)