DoT gives bank guarantees back to Airtel and Voda Idea
NEW DELHI: The government has returned bank guarantees of nearly ₹23,000 crore to Bharti Airtel Ltd and Vodafone Idea Ltd, two people familiar with the matter said, offering a major relief to the telecom operators.
In an affidavit in the Supreme Court, the department of telecommunications (DoT) said it returned the bank guarantees as the carriers opted for a moratorium on spectrum auction instalments and no such instalment payments were due until the moratorium period ends in 2025. Vodafone Idea will gain the most from the government decision as it has been seeking a return of the bank guarantees, which would help pare its debt by ₹15,000 crore.
The debt reduction process will be aided further by converting interest on the dues—from adjusted gross revenue and spectrum payments amounting to ₹16,000 crore—into equity to be held by the government. Vodafone Idea’s debt pile is at ₹1.9 trillion.
Vodafone Idea recently received an infusion of ₹4,500 crore from its promoters, Vodafone Group Plc and Aditya Birla Group. The telco is also in talks with investors to raise an addiamid
ACCORDING TO A PERSON FAMILIAR WITH THE MATTER, BANK GUARANTEES OF ABOUT ₹7,0008,000 CRORE HAVE BEEN RETURNED TO AIRTEL.
tional ₹10,000 crore through equity or debt, funds that will be critical to purchase 5G airwaves in upcoming spectrum auctions intense competition from larger rivals Reliance Jio and Bharti Airtel. According to a person familiar with the matter, bank guarantees of about ₹7,000-8,000 crore have been returned to Airtel.
DoT told the top court that the telcos were directed to submit bank guarantees equal to the next payable instalment, including the part of the deferred amount due with the instalment, 13 months before the next due date after the moratorium period ends.