By CIO Insider Team
 

According to reports, the government has opted to provide a new relief package to Vodafone Idea by capping its adjusted gross revenue (AGR) liabilities at Rs.87,695 crore and allowing the financially troubled telecom company to settle the amount across a 10-year timeframe commencing in 2031-32. This indicates a five-year delay for Vi, which was set to start settling its AGR payments to the government in March 2026.

This comes after a recent Supreme Court ruling, permitting the government to evaluate and settle Vodafone Idea’s AGR liabilities up to the fiscal year 2016-17. The telecom company, created by the 2018 merger of Vodafone Group from the UK and Idea Cellular from Aditya Birla Group, had approached the Supreme Court to seek a reassessment of its dues, along with a waiver of penalties and interest due to its financial difficulties.

Despite a Union Cabinet meeting on Wednesday reportedly discussing the Vodafone Idea AGR moratorium proposal, the government, holding a 49 percent stake in the telecom company due to a previous conversion of Vi’s dues, has not verified this information.

Vi's share price jumped notablyon Wednesday morning following news that the Union Cabinet would approve a relief package for the telecom company, but the stocks ended the day down 11.53 percent amid suggestions that a five-year moratorium was proposed rather than a complete dues waiver.

In its message to the exchanges, Vi stated that it had not "received any communication from the government" concerning the suggested amnesty. “Whenever there is a development that necessitates disclosure, we will take the appropriate action,” Vi stated.

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According to reports, the central government believes this support will allow the telco to either secure funds for its recovery or attract a strategic investor.

[CIOS_QUOTES_REPLACEAlongside the government support, the telecom company has finalized a new deal with its promoter group, Vodafone Group from the UK, to reclaim as much as Rs.5,386 crore in debts associated with the 2017 merger of Vodafone India and Idea Cellular. Vi confirmed that these liabilities pertain to any future legal, tax, or regulatory obligations that may arise following the merger.

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The Vodafone Group and its promoters will transfer Rs 2,307 crore in cash to the Indian company within the next 12 months.

In addition to this, Vodafone Group shareholders will reserve 3.28 billion Vodafone Idea shares for a five-year period, which may be sold as directed by the company.

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The money generated from this sale will also benefit Vodafone Idea. At prevailing market rates, the worth of these shares is estimated at around Rs 3,500 crore.