KM Birla’s new bet to save 28.19 crore customers of Vodafone-Idea

Vodafone Idea: 

KM Birla's new bet to save 28.19 crore customers of Vodafone-Idea

Aditya Birla Group Chairman Kumar Mangalam Birla wrote a letter to Cabinet Secretary Rajiv Gauba in June saying that any investor Vodafone is not keen to invest in Idea. They are ready to give their stake to the government or other companies to keep the company running.

Vodafone-Idea, the country’s third-largest telecom company, is currently facing a cash crunch. Vodafone-Idea is facing a crisis of closure after the recent Supreme Court verdict on AGR dues. Now to save Vodafone-Idea, Aditya Birla Group Chairman Kumar Mangalam Birla has made a big bet.

Kumar Mangalam Birla has offered to give his stake in Vodafone-Idea Limited to the government or any other company. So that the government can consider keeping this company running. Birla has made this offer by writing a letter to Cabinet Secretary Rajiv Gauba in June. According to official data, Vodafone-Idea has a total liability of Rs 58,254 crore related to AGR dues. Out of this, the Company has been paid Rs.7854.37 Crore. Now the company has an outstanding of Rs 50,399.63 crore. VodafoneIdea along with Bharti Airtel had filed a petition in the Supreme Court for re-calculation of AGR dues. But the Supreme Court had dismissed the petition last week.

Birla’s 27 per cent stake in Vodafone: 

Kumar Mangalam Birla holds a 27 percent stake in Vodafone Idea Limited. In his letter, Birla has said that investors are not willing to invest further in the company. Birla says investors are reluctant to invest due to ambiguity on AGR dues, inadequate moratorium on spectrum payment, and most importantly floor price system being higher than the cost of service.

The company will reach the brink of closure: 

In a letter written on June 7, Birla has said that Vodafone Idea Limited will be on the verge of closure if there is no immediate help from the government on these three points. With a sense of duty towards the more than 28 crore Indian customers associated with Vodafone Idea, I am ready to give my stake to any government, private entity. However, there has been no response from the Birla Group or Vodafone Idea regarding this letter. However, it is not yet known whether there has been any correspondence between Birla and the government after this letter.

The company is yet to raise funds: 

In September 2020, the board had approved Vodafone Idea’s proposal to raise a fund of Rs 25,000 crore. However, the company is yet to raise funds. According to Birla’s letter, the company has not yet approached any Chinese investment. Barring Chinese investors, most foreign investors are hesitant to invest in the company.

Vodafone has a total debt of Rs 1.80 lakh crore: 

As of 31 March 2021, the company had a total debt of Rs 1,80,310 crore. It does not include lease liabilities. In this loan, the liability of Rs 96,270 crore is of deferred spectrum payment. Banks and financial institutions have a debt of Rs 23,080 crore. The Balance amount is AGR-related liability.

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