Cash strapped telecom operator Vodafone Idea has asked the Department of Telecom for more time to pay spectrum dues.
"We request you to please grant us another year of moratorium to pay this instalment in April, '23, instead of April, '22. We are making this request well in advance considering the fact that it is almost inevitable that we will not be able to pay this in April 2022 and DoT will need some time for processing this request internally,” Vodafone Idea said in the letter to the DoT.
This comes even as the company's auditors have expressed concerns about its ability to continue as a going concern due to poor cash flows.
“The company’s financial performance has impacted its ability to generate the cash flow it needs to settle/ refinance its liabilities and guarantees as they fall due, which, along with its financial condition, has resulted in material uncertainty that casts significant doubt on the company’s ability to make the payments mentioned therein and continue as a going concern,” the auditor said.
According to the analysis done by Credit Suisse, cash generation done by VIL remains inadequate and a cash balance at ₹3,500 crore is precariously low. According to the Credit Suisse report, VIL will need a meaningful capital infusion to break out of this vicious loop of under investment and market share loss.
VIL has about ₹22,500 crore dues payable between December 2021 and April 2022, which include Supreme Court mandated Adjusted Gross Revenue (AGR) as well as annual spectrum payments of ₹15,900 crore that become due from April 2022 after a two-year moratorium.