As per newspaper reports, mobile tower giant Indus Towers (Indus) is learnt to have asked debt-ridden Vodafone Idea (VIL) to clear outstanding dues and pay every month on time for continuity of the business post-November.
- The step is supposedly taken after the independent directors of Indus raised concerns on the mounting receivables from VIL
- At present, VIL is estimated to owe around Rs 6,800 crore to Indus and Rs 2,400 crore to another tower major, American Tower Corporation (ATC). ATC is also mulling to take similar action against VIL.
- Indus has proposed the following
- 80% payment of current month dues
- Regular payment of bills from November 2022
- Prompt clearance of past dues
- VIL has proposed the following
- Part payment of the billed amount till December 2022
- 100 per cent of monthly bills clearance from January 2023
- Clearance in a phased manner between January 2023 and July 2023 of the old dues that will accumulate till December 2022
Personally I don’t think anything substantial will happen atleast for the next 3-6 months. There would be some mutual agreement on the payment structure between Indus and VIL and some dues will be repaid.
However, given VIL’s signifiant outstanding debt of almost Rs 2 lakh crore, very unlikely that the agreed terms will be adhered for long.
VIL is in serious need of large fund infusions and structural changes to survive.
Indus Towers has informed TRAI that it may limit services to VIL due to the mounting receivables.
As of September 30,2023, VIL’s dues in error to Indus stood at Rs 7,864.5 cr.
As was expected – the agreed terms in the above arrangement were not adhered to.
https://www.business-standard.com/companies/news/may-restrict-services-to-vodafone-idea-if-dues-unpaid-indus-towers-to-trai-123100500217_1.html