Not privy to Kumar Mangalam Birla's letter to Centre, clarifies Vodafone Idea

Vodafone Idea Ltd (VIL) clarified on Thursday that it is not privy to the letter written by its promoter Kumar Mangalam Birla to Cabinet Secretary Rajiv Gauba, expressing willingness to offer Aditya Birla Group's 27% stake in the debt-laden telco to any government or domestic financial entity in order to keep the company afloat. 

The letter was reportedly written on June 7. Clearing its stance on the said communication, Vodafone Idea elucidated: "We are not privy to the correspondence by the promoters and, therefore, cannot comment on the report. On our part, the Company has, at all times, been providing information in compliance with Regulation 30 of the SEBI LODR Regulations, 2015 and will continue to do so."

Birla, in his letter to Gauba, had reportedly proposed to give up his control of the telco more than a month before the Supreme Court (SC) rejected VIL's application for re-computation of the AGR (adjusted gross revenue) dues, emphasising the need for urgent measures from the Centre.

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VIL along with Bharti Airtel had approached the Supreme Court for correction in the government calculations but their plea was rejected.

According to official data, VIL had an adjusted gross revenue (AGR) liability of Rs 58,254 crore, out of which the company paid Rs 7,854.37 crore and Rs 50,399.63 crore is outstanding.

In the letter, Birla said investors are not willing to invest in the company in the absence of clarity on AGR liability, adequate moratorium on spectrum payments and most importantly floor pricing regime above the cost of service.

"Without immediate active support from the government on the three issues by July, the financial situation of VIL will come to an "irretrievable point of collapse," Birla had said in the letter.

"It is with a sense of duty towards the 27 crore Indians connected by VIL, I am more than willing to hand over my stake in the company to any entity- public sector/government /domestic financial entity or any other that the government may consider worthy of keeping the company as a going concern," Birla said in the letter.

It could not be ascertained whether there were any other communications between Birla and the government after the June 7 letter.

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In September 2020, VIL had received approval from its board to raise up to Rs 25,000 crore. However, the company has not been able to raise the funds so far.

According to Birla's letter, VIL has not yet approached any Chinese investors. Foreign investors, mostly non-Chinese, are hesitating in making investment in the company for understandable reasons, he added.

VIL's gross debt, excluding lease liabilities, stood at Rs 1,80,310 crore as of March 31, 2021. The amount included deferred spectrum payment obligations of Rs 96,270 crore and debt from banks and financial institutions of Rs 23,080 crore apart from the AGR liability.