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According to the most recent information, Indus will monitor Vi’s financial situation and payment patterns in order to recover past due amounts.

Indus Towers Presses Vi to clear Dues, Rules out Further Payment Plan Relaxation: Report

In Thursday’s fourth-quarter earnings report, the company’s management stated that Vi has started to liquidate 90% to 100% of its current accounts receivable. However, Indus will keep an eye on the telecom company’s payment patterns and financial status in order to make the agreed-upon deadline for collecting the unpaid balance.

HIGHLIGHTS

  • Vodafone Idea has ruled out any more payment schedule flexibility because Indus Towers is pressuring the business to pay up its past-due obligations.
  • Vi has committed to pay Indus’s outstanding obligation in full commencing in January 2023 in accordance with the current payment schedule.
  • Vi accounts for more than 40% of Indus’ revenue, therefore ensuring its profitability is crucial for the company’s long-term financial health.

A significant telecoms operator, Indus Towers, is putting pressure on Vodafone Idea (Vi) to pay off its unpaid debt and disallowing any relaxation of the payment schedule established earlier this year. According to the ET report, Indus is closely watching the telecom company’s payment habits and financial situation despite an improvement in payment from 90% to 100% of its current receivables. This is done in an effort to recover its accumulated outstanding receivables on the scheduled basis.

Vi has started paying 90 to 100% of its current accounts receivable, according to the company’s management, at the Indo’ In Thursday’s fourth-quarter financial release. However, Indus will keep an eye on the telecom company’s payment patterns and financial status in order to make the agreed-upon deadline for collecting the unpaid balance. As long as Vi consistently pays its continuing costs, Indus has stated that it won’t cut back on its services or restrict Vi’s access to its towers.

Indus Towers Q4 Net Profit Drops 23% Due to Doubtful Dues from Vodafone Idea (Read More)

Indus Towers CFO Vikas Poddar said at the results conference that “there won’t be a fresh payment plan for them in FY24.” We and the customer are actively negotiating to clear the backlog of outstanding invoices.

Vi has committed to pay Indus’s outstanding obligation in full commencing in January 2023 in accordance with the current payment schedule. It will also pay its backlog of prior accrued outstandings as of December 31, 2022, over a seven-month period beginning in January as part of the agreed-upon higher payment schedule.

Vi has, however, already raised issues with sticking to the enhanced payment plan during the third quarter of FY23. The telco has been unsuccessful in raising about Rs 20,000 crore through a loan and equity combination since more than a year ago.

There could be some issues, but Vi and I are working together, and we anticipate coming up with a solution in line with the agreed-upon payment timeline.

Vi accounts for more than 40% of Indus’ revenue, therefore ensuring its profitability is crucial for the company’s long-term financial health. A rough estimate of 7,000 crore rupees is what Vi owes Indus.

Separately, the Indus management stated that the tower company would only think about dividend distributions if its operating financial position was more stable. It is said by Poddar that “any dividend distribution can only be considered once the stress levels in the working capital situation ease.”

What do you think?

Written by Shallu Srivastav

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