(Reuters) -India’s Vodafone Idea had its petition to waive more than $5 billion in debt it owes to the government rejected by the country’s top court on Monday, dealing a major setback to the telecoms giant.
The company has struggled to pay outstanding spectrum and revenue-sharing dues since a landmark 2019 Supreme Court order widened the scope of revenues on which the payments are assessed.
The court also dismissed a similar petition from larger rival Bharti Airtel, but the rejection will have more of an impact on Vodafone Idea, India’s third-biggest telecoms carrier with an estimated net debt of $25 billion as of September.
The company’s stock fell as much as 10% on Monday following the court ruling.
“We believe… very firmly, these are misconceived writ petitions,” the court said, dismissing the requests.
Vodafone Idea approached the court after the government rejected its request for a waiver on interest and penalties it owes on $9.76 billion in dues, which the company said was putting its survival at risk.
The firm, a joint venture between UK-based Vodafone Group Plc and India’s Aditya Birla Group, had asked the judges to direct New Delhi to act “in public interest” and protect the “sensitive telecom sector”.
To help Vodafone Idea, the government has gradually converted part of the dues into equity and increased its stake in the company to 49%.
The ruling on adjusted gross revenue has been the biggest overhang for India’s telecom industry, increasing demands on companies by billions of dollars.
“No support will lead to a point of no return,” Vodafone Idea CEO Akshaya Moondra wrote in an April 17 letter to the government. The company “will not be able to operate beyond FY26”.
“The request cannot be considered,” India’s communications ministry wrote in response on April 29.
(Reporting by Munsif Vengattil and Nandan Mandayam; Editing by Saad Sayeed, Kirsten Donovan)
