A subsidiary of Tata Communications has issued a termination notice to its customer, Vodafone Idea Limited (Vi), after the latter failed to pay the former in due time. Tata Communications said it is in discussion on a disengagement transition plan with the customer.
In a notice to the stock exchange, Tata Communications said that the carrying amount of trade receivables (including unbilled revenue) from the customer was Rs 2.21 billion as of December 2023. It added that the group believes that the balance is a good and recoverable basis for its ongoing interactions with the customer. The dues from Vi increased from Rs 1.71 billion as of March 2023.
In its note to the financial results for the quarter ended December 2023, Tata Communications said that its customer, in its declared unaudited results for the quarter ended September 30, 2023, had expressed its ability to continue as a going concern, to be dependent on raising additional funds as required, successful negotiations with lenders and vendors for continued support, and generation of cash flow from operations that it needs to settle its liabilities as they fall due.
The telco added that the results stated that as of September 30, 2023, the said customer has met all its debt obligations payable to its lenders/banks and financial institutions along with applicable interest and has utilised an extended credit period to discharge some of its contractual obligations. The customer continues to be in discussion with its vendors to agree to a payment plan for the outstanding dues. Also, in February 2023, the customer allotted equity shares to the Department of Investment and Public Asset Management towards the conversion of the net present value of the interest amount relating to the deferment of certain dues and accordingly, the government now holds a 33.1 per cent stake in the said customer.
