TELECOM giant Vodafone Idea will have to be closed down if the government doesn't provide relief that the company has sought, the group’s chairman Kumar Mangalam Birla said on Friday (6).
"We will have to shut shop," Birla said on a query about the course of action for the company going ahead in the absence of government relief.
He was speaking at the Hindustan Times Leadership Summit here in New Delhi.
Birla indicated that his group will not invest any money in the company in the absence of relief from the government.
"There is no sense that good money should follow bad money," he said.
Birla said the company will have to opt for insolvency route in the absence of relief.
India’s second-largest phone operator was formed in 2017 by the merger of the British firm’s local unit with billionaire Birla’s Idea Cellular Ltd.
After posting the worst quarterly loss in India’s corporate history last month, Vodafone Group Plc’s besieged local venture is appealing for urgent relief from the government to help avert further losses followed by a collapse.
Facing a $4 billion (£3.05bn) demand from the Indian government to cover past dues, Vodafone Idea Ltd. took a one-time charge that led to a net loss of $7.1bn (£3.41bn) in the September quarter.
Hit with a £10.66bn of net debt, Vodafone Idea is fighting for survival after the country’s Supreme Court last month gave a ruling asking it to pay extra fees the government said were due from earlier years.
In its October ruling, India’s top court ordered in favour of the government’s method of calculating operators’ revenue.
According to the ruling, the telecom carriers in India must pay about £9.90bn.
