Vodafone Plc, the British telecom giant, announced that the Vodafone Group’s investment in the debt-ridden telecom operator Vodafone Idea Ltd (VIL) has a carrying value of zero.
What Happened? The company stated in its FY23 preliminary results that it would record no more losses in relation to VIL.
Vodafone highlighted that VIL needs additional liquidity support from lenders and aims to secure more funding. However, it expressed significant uncertainty regarding VIL’s capacity to cover remaining liabilities. The group anticipates no further cash payments from VIL as of March 31, 2023.
Vodafone stated that its potential exposure to VIL’s liabilities is capped by the aforementioned mechanism, hence, the company does not report any contingent liabilities from litigation in India concerning Vodafone India’s operations.
Earlier this year, the government approved the conversion of over ₹16,133 crore of Vodafone Idea’s interest dues into equity, issuing equity shares at face value to the government. This relief forms part of a government reform package announced in September 2021.
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Having once been the largest telecom operator after the Vodafone-Idea merger in 2018, with a 43 crore mobile subscriber base and 35% market share, VIL has now fallen to a distant third position in the sector.
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