Vodafone Idea in talks to refinance over Rs 6,000 crore debt: Report

Crisis-hit Vodafone Idea (Vi) is in talks with bond holders to refinance over Rs 6,000 crore of debt, according to a report by the Business Standard. The said amount is due in the next four to six months.

Hit by intense competition, low tariffs, and a debt of Rs 1.9 lakh crore, Vi is reportedly working to raise cash and save interest costs. It plans to raise Rs 25,000 crore from investors, however, have not yet fructified. The management is also hoping for a favourable decision from the government on floor tariffs.

“We are generating positive cash from our operations, which enables us to meet our capex requirements, interest payments, and smaller principal payments. We have lumpy redemptions from December 2021 to February 2022, for which we are working on two fronts. First, we are engaged with investors to get new funding and, second, we are in discussion with bond holders to see refinancing possibilities,” Chief Financial Officer, Akshaya Moondra, was quoted as saying by the publication.

Also Read — Vodafone Idea CEO pens note to users, says telco committed to offering superior services, propositions

The total gross debt (excluding lease liabilities and including interest accrued but not due) as of June 30, 2021, of VIL, stood at Rs 1,91,590 crore, comprising of deferred spectrum payment obligations of Rs 1,06,010 crore and AGR liability of Rs 62,180 crore that are due to the government. The debt-ridden VIL posted a lower consolidated loss of Rs 7,319 crore for the first quarter ended June 30, 2021, against a Rs 25,460 crore loss in the same quarter a year ago.

Moondra said that the company had received Rs 1,000 crore in the form of income tax refund in the June quarter and expected to receive a significant part of the remaining Rs 5,800 crore within the year.

In the first quarter of FY22, Vi narrowed its net loss by 71 per cent to Rs 7,319 crore on a year-on-year basis on account of lower exceptional expenses. In the same period last year, it had posted a net loss of Rs 25,460 crore due to provisioning for adjusted gross revenues.

Analysts, however, have raised concern at its falling subscriber base, which shrunk by 1.24 crore to 25.54 crore in the June-end quarter. Even the trend of steady increase quarter-on-quarter in its 4G customer base has now been reversed. Vi’s 4G subscriber base fell by 10 lakh in the first quarter of FY22 to 11.3 crore over the previous quarter.

Vi Managing Director and CEO Ravinder Takkar blamed the subscriber loss to the second wave of the pandemic and added that the 4G customer base remained stable.

(With inputs from PTI)

Check out DH's latest videos: