Vodafone India
November 19, 2019
Vodafone going to close in India? Have to pay Rs.28,309 crore tax to gov. of India?
Vodafone says not leaving India, rumours of its exit baseless
The rumours that Vodafone going to exit Indian market, but Vodafone in the UK says that these rumours are totally baseless.
There some rumours doing rounds in the Indian telecom industry, according to report by news agency's, Vodafone is, which is one of biggest telecom companies in India, may leave the Indian market because its losses are mounting. If it leaves, it not clear what will happen with Vodafone services in India. It possible that the services may cease working & that is big if depending on whether Vodafone leaves India or not or it's users may migrated to some other company.
Vodafone in the UK has issued statements terming the rumours baseless. The group, which operates in India as a part of joint venture with Vodafone Idea, said that these were challenging times but it's was not looking at any exit.
Vodafone is totally aware of the unfounded and baseless rumours circulating in some of the Indian news media that we have decided to exit the market. We would like to categorically state that this is not true and it is malicious.. the company is engaging with Indian Government and is fully supportive our local management as they continue to manage our joint venture to these challenging times.
According to the IANS report, Vodafone is ready to "packup & leave any day now." This could be due to the mounting operational losses & declining market capitalisation which is adversely affecting to the balance sheets of Vodafone Idea India & hindering any fundraising opportunities for the company, further the company is also losing lakh of subscribers every month.
Vodafone also reported massive losses in the recent financials quarter this year, the company stock market value has consistently been declining after the merger of Vodafone and Idea Cellular. It's reported total net loss of Rs 4,067 crore in 1June 2019 compared with net loss of Rs 2,757 crore in 1June 2018.
There were reports few days back that Vodafone Idea has reached out to creditors for debt recast to which the company issued clarification on Wednesday. The company said that it continues to pay all debts as per the schedule & has not approached any lender for debt recast, further, it has called these reporting factually incorrect & added that it continues to pay the debt as & when dues it come.
The financial stress to the Vodafone Idea may worsen as the company hasbeen ordered by the Supreme Court to pay Rs.28,309 crore related to its AGR judgement, the company may file a review application on the court order if there any scope.
Assuming to no relief comes through the outstanding liability at Rs 27,900 crore & another potential large demand for past SUC underpayment would make that already stressed situation even tougher for Vodafone Idea India. The company may need to resort another large equity raise to fund these payouts. Airtel balance sheet is relatively better & while the payouts will increase the leverage ratios, we believe the situation is far more manageable for Airtel.
