Monday , February 17 2020
Home / india / Voda Idea The AGR fee can go up even further

Voda Idea The AGR fee can go up even further



KOLKATA: Vodafone Idea estimates that the AGR fee of Rs 44,200 crore could rise sharply, requiring additional provisions and expanding the balance sheet, if the methodology adopted by the telecommunications department to calculate such liabilities is different, analysts said.

ICICI Securities said Vodafone Idea had indicated during an analyst call on Friday that it had "estimated adjusted gross income liabilities (AGR) at Rs 44,200 crore (including penalties and interest) through differential interest rates of 18% and 12.5% ​​(both compounded every year), and (that) if done in another way, the responsibility of the AGR will increase significantly ".

chart

Voda Idea, the broker said, also showed "the estimated principal AGR (component) of Rs 11,100 crore was based on notification of requests received (from the Telecommunications Department), and" the last 2-3 years of work were estimates of the companies themselves ".

The one-year-old telecommunications company – born of the Indian Vodafone merger and Idea Cellular – recorded a large loss of Rs 50,921.9 in the July-September quarter, and internally pegged additional AGR obligations at Rs 44,200 crore for license fees, usage fee spectrum (SUC) , interest and penalties that must be paid in less than three months.

This is after the Supreme Court decision on October 24 regarding adjusted gross income (AGR) issued.

Credit Suisse said if the total AGR of telecommunications contributions worked higher at "Rs 54,200 crore according to the DoT's internal estimate base of the report, the company must make additional provisions of Rs 10,100 crore".

Analysts say AGR Vodafone Idea's significant responsibilities add to its uncertain future, and may require companies to look for other large equity infusions to survive if substantial assistance will not come from the government.

This is because the company can only access Rs 8,370 crore from the Vodafone Group co-parent to settle crystallized pre-merger contingent liabilities, and therefore, must fully bear the balance of Rs 35,830 crore from its AGR contributions.

Although this is easier said than done, analysts say, because the British Vodafone Group has ruled out further equity participation in Voda Idea, while the Aditya Birla Group is also reported to dislike such infusions in telecommunications joint ventures, and possibly leave it bankrupt. if the government doesn't help.

Voda Idea said his ability to continue as a 'sustained concern' depends on getting help – including waiver of interest, penalties for contributions related to AGR, lower taxes and levies, and a moratorium on spectrum payments – from the government.

Ravinder Takkar, managing director of the company, said that giving aid was very much in the hands of the government because it had won the AGR case, and could act in the interests of the telecommunications, economic and consumer sectors.


Source link