Voda Idea to shut down if no relief comes: Kumar Mangalam Birla
Vodafone Idea shares fell over 5 per cent on Friday, spooked by Birla's comments. The stock slumped 5.34 per cent at Rs 6.92.
New Delhi: Anticipating a ‘bailout option’ from the government to save the company from closure, Vodafone Idea Chairman Kumar Mangalam Birla said on Friday there is no sense that good money should follow bad money. Birla said the company would face a shutdown, rather a ‘forced closure,’ if the government doesn’t provide relief to the telecom service providers.
He said the Aditya Birla Group will not invest money in the company in the absence of relief from the government. “If we are not getting anything then I think it is end of the story for Vodafone Idea, which will shutdown if the government does not provide relief on the liability it faces in past statutory dues following a Supreme Court order,” Birla said at an event here.
Vodafone Idea Ltd, India’s second largest mobile service provider by subscriber base, is facing pressure from the government on payment dues of a staggering Rs 53,038 crore.
Birla has called for a dialogue between government officials and the judiciary to agree to a settlement for the troubled operators, but he warned that “If these came to nought, I think it is the end of the story for Vodafone Idea. Because the telecom sector is key to India’s digital goals, more relief from the government should be forthcoming.”
On the massive dues to the government over adjusted gross revenues (AGR), Birla said, “The big elephant in the room is AGR. Which is actually, I think, something which lies in the court of judiciary. I believe government can have a dialogue. This was a suit filed by the government against telecom service providers.”
Vodafone Idea shares fell over 5 per cent on Friday, spooked by Birla’s comments. The stock slumped 5.34 per cent at Rs 6.92.
The Supreme Court had upheld the government position that non-telecom revenues have to be included in the AGR for calculating dues. “Since the government has won, it gives them headroom to talk to judiciary and try to find some of solution. I don’t know which form or shape it takes,” he added.