Discussions on with Indus Towers for softer payment terms, says Vi
Vodafone Idea (Vi) is in discussions with Indus Towers Limited for softer payment terms, the telecom company said in a stock exchange notification late Thursday.
This follows Indus Towers’s warning letter to Vi to pay up its accumulated dues or face disconnection from November.
“Indus Towers is one of the large vendors who provide passive infrastructure services to the company. The company has been in discussions with Indus for softer payment terms, which are continuing, but have not been concluded yet,” Vi said in its notification.
Vi’s dues to Indus Towers are said to be over Rs 7,000 crore. Similarly, it reportedly owes over Rs 2,000 crore to American Tower Corporation. Both the companies are piling pressure on Vi to clear its dues. Earlier this week, Indus Towers shot off a letter to Vi asking it to clear all past dues or risk disconnection from November.
The loss-making telecom company has been trying to raise funds from external investors but has not been successful till date. The proposed issuance of around 35 per cent stake to the government following the telecom reforms package too, has not materialised. According to a media report, banks too, are unwilling to lend money until promoters infuse fresh capital. Vi said that return of bank guarantees and recent fund infusion by promoters are positive catalysts and it remains in discussion with lenders.
Vodafone Group Plc, co-promoter of Vi, sold 7.1 per cent stake in Indus Towers in February to Bharti Airtel and an undisclosed investor. Funds from the stake sale were infused to clear Indus Towers' dues. Vi and Indus Towers had renegotiated their agreement in the same month, including those related to share pledges from Vodafone Group. Vi had agreed to pay certain minimum amounts to Indus Towers till July 15 as per the agreement.
In a post Q1 investor conference call in August, Indus Towers said that the customer (Vi) has proposed a payment plan wherein they have conveyed the ability to pay part of the billed amount till December 2022 and 100 per cent thereafter along with clearance in a phased manner between January 2023 and July 2023 of the old dues that would accumulate till December 2022.
“We are engaged with the customer to work out a better payment plan, hence we expect to see gradual improvement in our trade receivables position that we will continue to monitor very closely,” Indus Towers' Chief Financial Officer Vikas Poddar had told analysts.