Telecom operator Vodafone Idea, which is in dire financial straits, has applied for an emergency loan of Rs 7,000 crore from banks. The money is to be used to repay part of the loan from Indus Tower.
Vodafone Idea is the 3rd largest private telecom operator in India. The company is jointly managed by UK’s Vodafone and India’s Aditya Birla Group. The company is in heavy losses. As per the September quarter results, the company’s debt level stood at Rs 2.2 lakh crore. Its share price is selling below 8 rupees. The company’s net worth is in the negative at Rs 76,416 crore. That means there are more debts than assets.
Tower structure is important for uninterrupted service. Indus Tower provides the tower architecture for Vodafone. Vodafone owes Rs 7,500 crore to the company. The monthly fee ranges from Rs.250 to Rs.300 crore. Indus had earlier warned of cancellation of approvals for tower sites if the dues were not paid. It then announced that it would temporarily suspend payments. It was accepted by Indus Tower.
It has agreed to pay 100 percent of the current bill from January. It also said that the arrears till December 31, 2022 will be paid from this month. For this purpose, SBI, Punjab National Bank, HDFC, and IDFC, First have approached banks and asked for a loan of Rs 7,000 crore. But the banks have sought clarification on the government’s stake in Vodafone and its business development plans.
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