Government returns bank guarantees worth Rs 15,000 crore to Vodafone Idea
The Ministry of Telecommunications has returned bank guarantees worth Rs 15,000 crore to Vodafone Idea (Vi).
This is in line with last year’s telecommunications reform package which reduced bank guarantee requirements for license fees and spectrum usage rights. Vi confirmed the warranty return but did not comment on the amount.
While collateral worth Rs 2,000 crore related to licensing fees was returned to Vi earlier, spectrum related collateral worth around Rs 15,000 crore was returned a few days ago.
The bank guarantee of Rs 15,000 crore relates to spectrum auctions between 2012 and 2016. Vi opted for a four-year moratorium on the payment of dues and the existing bank guarantee relating to the auction was therefore returned.
However, the company must provide new guarantees for an amount equal to the next due date, including part of the deferred amount thirteen months before the next payment due date.
With the return of bank guarantees, Vi hopes to benefit from new financing from banks in the form of fund-based and non-fund-based facilities, such as letters of credit which it plans to use for supplier financing, the company’s chief financial officer, Akshaya Moondra, said in January.