Following the Supreme Court of India order directing the various telecom companies in the country to make payments on account of licence fees and a share of the adjusted gross revenues, there was an IANS report that Vodafone may exit Indian operations. The company has now denied these rumours, calling them baseless and has said they are very much engaged with the Indian government to settle the issue.
The Vodafone Group is operating the Indian business as Vodafone Idea after a merger with the Aditya Birla Group-owned Idea. The company will be called upon to make a payment of RS 28,309 crore if the Depart of Telecom, DoT raises its bill on the joint entity. The company could get into serious financial difficulties if it were to go ahead and make this payment.
Vodafone Idea along with the other telecom operators are now in discussions with the government to accept a staggered schedule for this payment so that the companies’ finances are not put in serious jeopardy.
Another rumour about Vodafone was that it had approached its lenders asking for a debt recast in the company. This has also been denied by the company in its statement: " We categorically deny and dismiss this as baseless and factually incorrect. We have not made any request for debt recast to any lender or asked for reworking of payment terms. We continue to pay all our debts as and when these fall due".
These developments have come at a time when the company’s long-term loans and debentures issued by the company are being rated at “A-“ by the rating agencies, down from “A” earlier.