Sold VODAFONE-IDEA company, not even save money for debt…
When the British telecom company Vodafone (VODAFONE) and one of India’s largest telecom companies idea (IDEA) were merged, nobody was aware that the new company after the Marjar would have such a bad fate. According to a report by a foreign brokerage firm, all assets of vodafone idea company should be sold and the company will be in debt of Rs 19500 crore even if the loan is repaid. Let me tell you that the company has recently released its quarterly results (Vodafone Idea Q1 Results). In which the company has shown itself a lot of losses. Let us also tell you what data the brokerage firm has tried to make its point worthwhile.
The company’s net worth came in negative
According to foreign brokerage firm UBS, Vodafone Idea has assessed additional AGR (adjusted gross revenue) provisions at Rs 199 billion and has shown a net loss of Rs 255 billion. Due to which the net worth of the company has gone up to Rs. 195 billion negative. Brokerage firm UBS said in its report on Friday that this means the company’s liabilities are higher than its assets. According to the report, the exceptional costs in the first quarter included Rs 19,440 crore related to the total estimated AGR arrears, Rs 123 crore as one time spectrum charge and Rs 3.70 crore as merger charge.
Company AGR Burden Big Enough
According to a CLSA report, vodafone idea’s AGR burden is ‘ huge ‘. Even if the company is given a 20-year term to repay the loan, the Department of Telecommunications estimates say that Voda Idea’s EMI will be 30 per cent cash ebitda, when the debt burden is also increasing by Rs 1.15 lakh crore. The CLSA said that some 80 per cent of this amount is of spectrum liabilities, including two-year moratorium.
Rs. 54,000 crore required to be paid
The telecom company needs to pay about Rs. 50,400 crore to DoT in the form of licence fee, spectrum usage fee (SUC), interest and penalty. The apex court has reserved its order on whether the telecom will be allowed to reduce its payment within a time-frame. The case is scheduled to be heard on 10th August.
Company loses over Rs 25,000 crore
Recently, Vodafone Idea has released the results for the first quarter of the financial year 2020-21. In which the company increased its deficit to Rs 25,460 crore in the April-June quarter. More provision in saturate out standing items has increased the company’s losses. In the same quarter a year ago, the company incurred a loss of Rs. 4,874 crores. The company’s operating income declined to Rs 10,659.3 crore in the first quarter of 2020-21 from Rs 11,269.9 crore in the same quarter a year ago. An additional provision of Rs. 19,440.5 crore had to be made under the AGR liability.
Why the company was harmed
As the company believes, the ‘ lockdown ‘ imposed to prevent the corona virus epidemic has seen an impact on the results of the first quarter. According to Ravindra Percussion, managing director and chief executive officer of Vodafone Idea, the first quarter of the financial year 2020-21 has been quite challenging. The closure of the store due to lockdown has affected the phone recharge availability and the ability of the customer to recharge financially.
Shares of the company up 7 per cent today
Talking about the company’s shares today, it has seen a spurt of more than 7 per cent. Today, the company’s shares closed at Rs 8.83. While it was open at Rs 7.90. Which reached a height of Rs 8.93 during the trading session. Yesterday, the company’s share closed at Rs 8.25. At present, the company’s market cap is Rs 25373.75 crore.
