CARE Downgrades Long-Term Bank Facilities, Non-Convertible Debentures Of Vodafone Idea
Vodafone Idea Ltd. said on Wednesday that CARE Ratings has downgraded its rating on long-term bank facilities and non-convertible debentures, citing the recent court ruling on the Adjusted Gross Revenue issue and extension of timelines with regard to sale of Indus Tower stake to Bharti lnfratel Ltd.
The Supreme Court, last week, had upheld Government's way of computing the telecom revenue, from which dues like licence fee and spectrum usage charges are derived, and as a result Vodafone-Idea, Bharti Airtel Ltd. and other telecom operators may have to pay the government a whopping Rs 1.4 lakh crore after including penalty and interest components.
According to the telecom department's initial calculations, Vodafone Idea may have to pay about Rs 40,000 crore, while Bharti Airtel faces a liability of around Rs 42,000 crore (including licence fees and spectrum usage charges).
In a regulatory filing on Wednesday, Vodafone Idea said, "it is hereby informed that Care Ratings Ltd., has downgraded its rating on long-term bank facilities and non-convertible debentures as per the rating rationale uploaded on its website today (that is on Oct. 30)".
Vodafone Idea added, "as per the rating rationale published on the website, the downgrade...is on account of recent Supreme Court ruling dated Oct. 24, 2019 on the AGR matter and also extension of the Long Stop Date from Oct. 24, 2019 to Dec. 24, 2019 for the sale of Indus Tower stake to Bharti lnfratel".
The credit rating has been revised to "credit watch with negative implications" from previously "negative" on Long Term Bank Facilities and Non-Convertible Debentures, the filing added.
Earlier on Wednesday Fitch Ratings placed Bharti Airtel on 'rating watch negative' over unpaid regulatory dues arising from a recent Supreme Court ruling.
Fitch placed Bharti's 'BBB-' Long-Term Foreign-Currency Issuer Default Rating on Rating Watch Negative as well as its and Bharti Airtel International (Netherlands) BV's senior unsecured bonds and Network i2i's subordinated perpetual bonds on RWN.