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The department of telecommunications (DoT) has returned bank guarantees (BGs) to Bharti Airtel and Vodafone Idea, according to an affidavit filed by the department in the Supreme Court. The bank guarantees amount to nearly ₹23,000 crore.
The department told the apex court that the BGs have been returned since the carriers had opted for a moratorium on spectrum auction installments and no such installment payments were due till post the moratorium period ends in 2025.
The move will come as a major relief to debt-laden Vodafone Idea which has been seeking return of the BGs from the government. This will help it lower its debt by a massive ₹15,000 crore. The reduction in debt will further be helped by the conversion of interest on the dues - from adjusted gross revenue and spectrum payments amounting to ₹16,000 crore – into equity to be held by the Indian government. Vodafone Idea’s total debt pile is nearly ₹1.9 trillion.
According to sources, bank guarantees of about ₹7,000- ₹8,000 crore have been returned to Airtel.
“Pursuant to the Cabinet decision and in the view of the fact that VIL and BAL had opted for such moratorium on spectrum auction instalments and no installment due necessitating security in the form of financial BGs till 13 months before the next payable instalment post moratorium period, DoT has returned the existing bank guarantees submitted by VIL and BAL, which were for securitizing the deferred annual spectrum installments in respect of the past auctions," the affidavit submitted by the DoT in the Supreme Court said. Mint has seen a copy.
The payments were due for auctions held in 2012,2014, 2015 and 2016.
The DoT told the Court that the telcos have been directed to submit FBGs of equal to next payable installment, including the part of the deferred amount due with the installment, 13 months before the next due date after the moratorium period.
Bharti Airtel and Vodafone Idea did not comment on the development as of Friday afternoon.
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