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Indus Towers on Tuesday said it had made a doubtful debt provision of Rs 2,298.1 crore against receivables from Vodafone Idea (Vi).
The company posted a net loss of Rs 708 crore in the third quarter of financial year (Q3FY23) on a total revenue of Rs 6,765 crore. In Q2, the company had made a net profit of Rs 872 crore on a revenue of Rs 7,967 crore.
The company yet again drew attention to how one of its largest customers’ financial conditions impacted its business operations and financial position.
“During the current quarter the funding plan of the said customer has not been realised and although the committed part payment till December has been received, the customer has indicated challenges in complying with the higher payment plan in future. Accordingly, the group followed a stringent policy for making doubtful debt allowance in respect of overdue recoverable,” the company said.
It stressed that the said customer’s continuance as a going concern was dependent on its ability to raise additional funds and successful negotiations with lenders and vendors for continued support, indicating not much had changed for Vi.
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Vi had submitted a payment plan that was approved by the tower company’s board. In October, Vi’s board decided to issue optionally convertible debentures (OCDs) worth Rs 1,600 crore to American Tower Corporation. The funds raised would be used to clear dues of the tower company.
Indus Towers, which is reported to have pending payments of over Rs 7,000 crore from Vi, did not consider a similar proposal. Instead, the company’s board agreed to the telco’s proposal of substantially paying its billed amount till December. Vi had agreed to pay 100 per cent of the billed amount and outstanding amounts between January-July 2023.
However, Vi reportedly has not yet begun paying the instalments.
Indus Towers had in October issued a warning to Vi to pay up its dues by November or face disconnection of towers. In response to an analyst query, the tower company’s management, however, said this was speculation and no towers were being disconnected.
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