Vodafone Group’s CEO, Nick Read, has reiterated his request for the Indian government to provide an aid package for Vodafone Idea, to help it meet its financial obligations and avoid insolvency.
On an earnings call with journalists this week, Read called for the government to waive associated interest and penalties relating to the company’s AGR dues, allow the firm to spread the payment of the principal amount over a 10 year period and grant a two year moratorium on payments.
As a result of a recent Supreme Court ruling over the way Indian telcos calculate their adjusted gross revenues, Vodafone Idea owes $7.4 billion (INR53,000 crore) in unpaid dues and penalties to the Department of Telecoms.
During a previous earnings call, Read confirmed that around three quarters of the outstanding amount related to penalty charges and late payment fees from the Department of Telecoms.
Read has been clear that Vodafone Group will not be injecting any new capital into its Indian joint venture and that the company will in all likelihood go to the wall unless a financial relief package is forthcoming.
"To be very clear: if you don't get the remedies that you are looking for and the situation is critical in terms of [existing as] a going concern. What you need to think about is that this is a joint venture in India and the remedy package is critical for the sustainability of the business going forward. We are not going to put more equity into it from the Group. Our view is: India it’s time for you to decide whether you really do want a vibrant and competitive market place," he said in November last year.