ATC in doubt regarding Vodafone Idea clearing its dues in January

In November, VIL issued approved issuing shares to the ATC Telecom Infrastructure, the Indian arm of the company on a preferential basis in order to settle their dues by converting the due amount into equity, in case the amount remains unpaid in 18 months.

The largest customer of ATC in India, Vodafone Idea Limited indicated during the September quarter that it will make partial payments of its contractual amount owed to the company under tenant leases for the remainder of 2022. The payments was including the payments paid for the three months ending September 2022.

VIL was short of around $48 million (392 crores) during the September quarter.

“We have deferred recognition of revenue on the shortfall amount until payment is received. Recognition of revenue on any future shortfalls in payment of contractual amounts will be similarly deferred.

“Based on indications from VIL, we expect to defer recognition of a similar amount for the three months ended December 31, 2022, pending resolution. VIL has communicated its intent to fulfill the full amount of its contractual obligations commencing January 1, 2023, although no assurance can be given that this will occur,” ATC said in an SEC (Securities Exchange Commission) filing.

In a filing in November, VIL cleared that the optionally-convertible debentures issued to ATC would be subject to certain conditions including the pending approval from the shareholders of the company and the government, which holds a large share in the company after it failed to pay its due in adjusted gross revenue and spectrum fee.

The company owed 16,000 crores to the government in form of interest payment from the deferment of adjusted gross revenue and spectrum dues. VIL opted to convert this liability into equity which gave the government a 33% stake in the company and the stake of promoters came down to 50% from 74.99%.

With inputs from PTI