Vodafone Idea receives $200m lifeline ahead of schedule
Vodafone Group has given its financially troubled Indian operation Vodafone Idea a US$200 million liquidity boost originally scheduled to clear in September, under the terms of its contingent liability mechanism (“CLM”) with Vodafone Idea.
In a statement, Vodafone Group said the payment was “accelerated” to provide Vodafone Idea with “liquidity to manage its operations, and to support the approximately 300 million Indian citizens who are Vodafone Idea customers as well as the thousands of Vodafone Idea employees during this phase of emergency health measures, taken as a result of the COVID-19 pandemic.”
The lifeline follows the ongoing AGR dispute between Indian telcos and the country’s government. The year started with Bharti Airtel and Vodafone Idea facing a $14.4 billion crisis after the country’s Supreme Court rejected their plea over the way dues are calculated.
Last week, GlobalData called on the Indian government to step in an assist the country’s top telcos in paying off around $54.46 billion in debt.
Vodafone’s statement continued: “Vodafone Idea has made payments to the Government of India in relation to its AGR liabilities. 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 CLM took effect at completion of the merger of Vodafone India and Idea Cellular in August 2018.”