India’s Top Court on Chiursday Rejected A Request by Telecom Companies to Reculte the Dues They Owed The Government, Sending Shares of Debt-Saddled Vodafone Idea and Its Peers Down.
Analysts at ICRA Estimate that Vodafone Idea and Bharti Airtel Owe 1 Trillion Rupees ($ 12 Billion) in Past Dues, Including Spectrum Charges and Licensing Fees. They, however, did not shd light on the Amount Owed by Other Companies.
The companies, in a last-resort petition against a similar ruling by the top court in 2021, Had argued that the telecom department made errors in calculating the so-causated adjusted gross reviews.
Telecom Firms Had Long Contected That only Revenue Accused From Core Services should be taken into account When computering the dues, while the government argued Revenue as Well, Such as Money from Rent or Land Sales.
The Supreme Court Had, in 2019, Rules in Favor of the Government’s Definition of Agr Calculations.
The latest ruling is a setback for vodafone idea, which owes the government Around 700 Billion Rupees in License Fees and Spectrum Charges, According to its latest Quarterly report.
The Indian Government is also one of the largest sharehlders in the company with a 23.1% stake.
Analysts did not expect the ruling to have a major impact on Bharti airtel due to its stronger finance.
Shares of Vodafone Idea Slumped About 20% After the News, While Bharti Airtel Briefly Turned Negative, But Closed 0.6% Higher.
“A positive ruling would have reduced vodafone’s debt by 350 billion rupees,” said Balaji Subramanian, A Research Analyst at IIFL Securities.
The ruling makes Vodafone’s Debt-Funding (250 BLN Rupee) Challenging SINCE Lesser Cash Flow WOLW WOLLW WORRY BANKS About Taking Exposure to the company, He said.
“If the relieve had come, their annual cash flow would be Higher by 80 Billion Rupees.”
Vodafone Idea and Bharti Airtel did not immediatily respond to reuters’ requests for comment.
© Thomson Reuters 2024
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(Tagstotranslate) Supreme court rejects telcos plea on agr dues owd to government vodafone idea
