Vodafone Group Pays $200 Million To Vodafone Idea Ahead Of Time
Vodafone Group said it has “accelerated” a payment of $200 million to Vodafone Idea Ltd. as liquidity support at a time its joint venture has to pay more than Rs 58,000 crore in statutory dues.
The amount was due in September as per the terms of the contingent liability mechanism between Vodafone Group and Vodafone Idea, London-headquartered company said in a statement. The group accelerated the payment to support approximately 300 million Vodafone Idea customers in India as well as thousands of Vodafone Idea employees during this phase of emergency health measures taken as a result of the Covid-19 pandemic, it said.
Vodafone Idea has to pay Rs 58,254 crore in pending dues after the Supreme Court ruled that telecom operators have to include non-core revenue to calculate statutory liabilities. That came as a crippling blow when its debt had ballooned and profits had fallen because of a tariff war. The joint venture between the British company and India’s Aditya Birla Group, which has warned about its ability to stay afloat, has so far paid Rs 6,854 crore.
Vodafone Group’s contingent liability mechanism came into force after the merger between Vodafone India and Idea Cellular was completed in August 2018. The British company’s exposure is limited to Rs 8,400 crore.
“Under the terms of the CLM, Vodafone Group is obliged to make payments to Vodafone Idea where amounts paid pursuant to the contingent liabilities of Vodafone India exceed those of Idea Cellular,” the company said in its statement.