Situation critical, India venture risks liquidation, says Vodafone CEO. Airtel and Bharti Infra among bidders for RComm assets.
Dire Straits: Vodafone's India venture is at a crossroad. Its CEO has said that unless the government eases off on some of the demands on mobile spectrum fees, the company risks liquidation. He said unless there's a reduction in spectrum fees and more leeway regarding repayment of debts, the situation would turn critical.
The company - which is based out of the UK - also faces the predicament of AGR licensing fees to the tune of $4bn, which the Supreme Court recently directed telcos to pay to the government. Vodafone Idea - of which Vodafone owns 45% - already has $14bn in debt and a market presence threatened by Reliance Jio, whose arrival in the Indian telecom scene set of a period of crippling price wars. BBG
Meanwhile: Reliance Communications, Vodafone's rival, has reason to worry too. It has secured a total debt of about INR33,000cr and is going through insolvency proceedings. And its assets up for sale have received bids from three firms - including Bharti Airtel and Bharti Infratel. Mukesh Ambani's Reliance Jio Infocomm itself has not placed its bid and has sought a 10-day extension. Hindu BusinessLine
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