Telecos get 10 years to clear AGR dues
SC sets timeline for 1st instalment of 10% by March 2021; Airtel seeks 15 yrs to clear dues
New Delhi: The Supreme Court on Tuesday granted 10 years to telecom companies to clear their respective adjusted gross revenue (AGR) dues and also directed them to deposit the first instalment of 10 per cent by March 31, 2021. A Bench headed by Justice Arun Mishra said the instalments should be paid by February 7 of every succeeding year. The apex court also warned the telecom companies that if there was any default, then it would accrue interest, and also non-payment would invite contempt of court proceedings against the firms. It also said it agreed with senior advocate Harish Salve that the National Company Law Tribunal (NCLT) should first decide whether spectrum can be a subject matter of resolution proceedings.
During the hearing, the Centre said it was fine with the 20 years arrangement to recover AGR dues, as senior advocate Mukul Rohtagi appearing for Vodafone Idea accepted the demand of Rs 58,000 crore AGR dues, and insisted that the only way to pay and honour the top court judgment is to allow Vodafone a 20-year payment period. Later, however, he agreed to a 15-year time period. Even, Airtel sought 15 years to clear the AGR dues. The Centre had informed the top court that the Cabinet has considered the issue and decided on a 20-year period, and it has provided this relief due to the cascading effect on the economy.
Vodafone Idea cracks nearly 13% Shares of Vodafone Idea on Tuesday tumbled nearly 13 per cent, while those of Bharti Airtel rose more than six per cent after the Supreme Court granted 10 years to telecom firms for paying the AGR-related dues to the Department of Telecommunications (DoT) with certain conditions.
Vodafone Idea shares tanked 12.76 per cent to close at Rs 8.89 apiece on BSE. During the day, it plummeted 24.53 per cent to Rs 7.69. The stock went into a tailspin after the order, erasing all its early gains. Shares of Bharti Airtel, however, jumped 6.38 per cent to settle at Rs 546.75. During the day, it rose by 7.99 per cent to Rs 555.05. Bharti Airtel was the top gainer in the Sensex pack. RIL shares also gained 0.43 per cent to close at Rs 2,087.55 apiece after rising 2 per cent to Rs 2,121.75 per unit during the day. The Supreme Court verdict is not as beneficial to Vodafone Idea as it is to Bharti Airtel. Vodafone was looking forward for a 20-year-payment cycle which has now reduced to 10 years.