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    Voda Idea shares fall nearly 2% after Indus warning

    Synopsis

    Its trade receivables stood at Rs 6,249.6 crore in the April-June period, largely due to delayed payments by Vi. The prolonged trade receivables issue prompted Indus to make a provision for doubtful debts of Rs 1,230 crore for ageing receivables.

    Voda Idea shares fall nearly 2% after Indus warningAgencies
    Vodafone Idea (Vi) shares fell nearly 2% to Rs 8.96 on BSE in early Wednesday trade after an ET report said that Indus Towers had asked the loss-making telco to clear its dues or run the risk of losing access to its towers from November.

    Vi’s mobile services to its over 255 million customers could be seriously disrupted if Indus blocks tower access to the cash-strapped telco.

    The tower company had shot off this warning to Vi in a strongly-worded letter written on Monday, said two people aware of the matter. This followed an Indus Towers board meeting earlier in the day that discussed the company's mounting trade receivables and noted that it was mainly due to payment delays by Vi.

    “Independent directors on the Indus board were upset about the prolonged non-payment of dues by Vi,” one of the people told ET.

    Vi’s accumulated dues to tower firms are estimated upwards of Rs 10,000 crore, of which it’s reckoned to owe well over Rs 7,000 crore to Indus and the balance to American Tower Co (ATC). The carrier has been trying to raise Rs 20,000 crore, split between more debt from lenders and equity, but hasn't been able to close any deal yet.

    Indus had reported a 66.3% on-year fall in its June quarter net profit to Rs 477.3 crore, stung mainly by heavy receivables.

    Its trade receivables stood at Rs 6,249.6 crore in the April-June period, largely due to delayed payments by Vi. The prolonged trade receivables issue prompted Indus to make a provision for doubtful debts of Rs 1,230 crore for ageing receivables.

    Vi’s trade payables jumped almost 13.6% sequentially to Rs 14,956.2 crore in the June quarter. Its payables – part of its current liabilities – include dues to tower firms, network vendors and other suppliers.

    In its letter, Indus is believed to have told Vi to clear all past dues (read: ageing receivables) at the earliest, pay 80% of its current monthly dues immediately, and going forward, clear 100% of monthly dues on time, failing which access to the tower network would be barred.



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    (What's moving Sensex and Nifty Track latest market news, stock tips and expert advice, on ETMarkets. Also, ETMarkets.com is now on Telegram. For fastest news alerts on financial markets, investment strategies and stocks alerts, subscribe to our Telegram feeds .)

    Download The Economic Times News App to get Daily Market Updates & Live Business News.

    Subscribe to The Economic Times Prime and read the Economic Times ePaper Online.and Sensex Today.

    Top Trending Stocks: SBI Share Price, Axis Bank Share Price, HDFC Bank Share Price, Infosys Share Price, Wipro Share Price, NTPC Share Price

    ...more
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