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Certain lenders to Vodafone Idea Ltd (VIL) have asked for an increase in interest rates and additional margin money/ security against its existing facilities.
This comes even as VIL has exchanged correspondence and continues to be in discussions with the lenders to get some concessions on the aforementioned demands.
This development also comes following cash strapped VIL reportedly being in talks with the State Bank of India seeking a loan lifeline.
Credit rating agencies have held a bearish view of the cash strapped telco, even after the announcement of the telecom relief package by the Government.
The September 15 decision of the Union Cabinet gave the company much-needed respite, by allowing it to defer their spectrum and AGR dues.
In the light of the company’s balance sheet status, auditors noted that VIL’s ability to continue is dependent on raising additional funds as required either through successful negotiations with its lenders or through increased cash flow from operations.
As of now, CARE ratings holds a ‘B-’ rating (under credit watch with Negative implications) for the telco. Instruments with this rating are considered to have high risk of default regarding timely servicing of financial obligations.
CRISIL has withdrawn its rating on Vodafone Idea since July 2020.
The group has incurred a loss of Rs 14,451 crore for the first half of the 2022 fiscal year ending on September 30, 2021.
As of September 30, 2021, the total debt of the group stands at Rs 1,94,778 crore. The existing debt, payable by September 30, 2022, is of the order of Rs 9,732 crore.
The entire net liability for AGR at Rs 63,398 crore and spectrum liability at Rs 1,07,356 crore is now a non-current liability for the company.
VIL, which is India’s third largest telco with 22.84 per cent market share in terms of wireless subscribers as on 31st August, 2021, reported a loss of Rs 7132 crore for the quarter ending on September 30, 2021.
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