The price action witnessed strong volume action in the stock with over 35.76 crore shares changing hands on the NSE in the intraday trade around 12 pm. Today’s rally takes the gains over 40% in the past one month.
Quoting DoT officials, an Economic Times report today said that the department will not invoke the bank guarantees if the company sticks to its payment plans but the guarantees will be encashed if the telecom services provider fails to do so.
“They (Vi) have written to us that significant progress has been made with several groups of investors but nothing specific has been informed by the company,” an official privy to the details told ET on condition of anonymity.
“Once the promoters infuse the Rs 2,000 crore into the company, there may be some movement on external funding,” said a second official, who did not wish to be identified.
Although the government is the largest shareholder in Vi with a 33.1% stake, it does not interfere with the day-to-day affairs of the company. It has granted the company various extensions to make statutory payments as it has been paying interest on the delay. The provisions for imposing penalties have been removed after the telecom reforms.
Over the past two years, the company has been struggling to raise funds, hurting its ability to expand 4G coverage and start a 5G rollout. The lack of funding is making it difficult for Vi to compete effectively with bigger rivals, Reliance Jio and Bharti Airtel.The company has sought an extension of 30 days to make payment for the 2022 spectrum auction instalment. The instalment of Rs 1,680 crore was due on August 17 but the company has availed a grace period of 30 days with interest to make the payment. In case of lack of external funding, the promoters are expected to put in Rs 2,000 crore so that the instalment can be made since a failure to do so can lead to revocation of bank guarantees.
Vi CEO Akshaya Moondra had told the DoT that the company was close to lining up a Rs 4,000-crore short-term loan from State Bank of India to pay its pending statutory dues as well as spectrum instalment. While a four-year payment moratorium was given by the government for past auctions and adjusted gross revenue dues, the 2022 sale was not part of it. The payment moratorium ends in the third quarter of 2025-26, after which Vi faces annual regulatory payouts of more than Rs 40,000 crore.
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