Vodafone Idea (Vi) is in talks with Indus Towers Limited for more flexible payment terms, the telecommunications company said in a stock market notification late Thursday.
This follows Indus Towers’ warning letter to Vi to pay its accrued dues or face disconnection from November.
“Indus Towers is one of the large providers that provide passive infrastructure services to the enterprise. The company is in discussions with Indus for more flexible payment terms, which are continuing, but have not yet been finalized,” Vi said in its notification.
Vi’s dues to Indus Towers are said to be over Rs 7,000 crore. Likewise, he owes more than Rs 2,000 crore to American Tower Corporation. Both companies are pressuring Vi to pay his rights. Earlier this week, Indus Towers sent a letter to Vi asking it to clear all arrears or risk a disconnect from November.
The loss-making telecommunications company has tried to raise funds from outside investors, but has so far been unsuccessful. The proposed issuance of about a 35% stake in government following the telecommunications reform package also failed to materialize. According to a media report, banks too are unwilling to lend money until developers inject fresh capital. Vi said the return of bank guarantees and the recent injection of funds by developers are positive catalysts and they remain in discussion with lenders.
Vodafone Group Plc, co-developer of Vi, sold a 7.1% stake in Indus Towers in February to Bharti Airtel and an undisclosed investor. Funds from the stake sale were infused to clear Indus Towers dues. Vi and Indus Towers had renegotiated their agreement the same month, including those related to Vodafone Group share promises. Vi had agreed to pay certain minimum amounts to Indus Towers through July 15, as per the agreement.
During a conference call with investors after the first quarter in August, Indus Towers said that the customer (Vi) had offered a payment plan in which he had conveyed the possibility of paying part of the amount invoiced until December 2022 and 100% thereafter, as well as a staggered clearance between January 2023 and July 2023 of old contributions that would accrue through December 2022.
“We are engaged with the client to work out a better payment plan, so we expect a gradual improvement in our trade receivables position which we will continue to monitor very closely,” Indus Towers’ chief financial officer told analysts. , Vikas Poddar.