Beleaguered telecom operator Vodafone Idea receive around Rs 5,836 crore from Vodafone Group as part of settling a liability claim agreement between the two companies.
Under the new agreement, Vodafone Group promoters provide Rs 2,307 crore to Vodafone Idea over the next 12 months based on the terms outlined in the amendment agreement.
Vodafone Group Pay ₹5,836 Crore to Vodafone Idea
Vodafone Group has also set aside its 328 crore shares in Vodafone Idea for the benefit of the company. Vodafone Idea can instruct Vodafone to sell these shares in one or more batches. Any cash from the sale will go to Vodafone Idea.
As of the date of the amendment agreement, the market value of the set-aside shares is Rs 3,529 crore, the filing said.
Signed merger agreement
A Contingent Liability Adjustment Mechanism established between both companies. It is during the 2017 merger agreement of Vodafone India and Idea Cellular. This mechanism covers pre-merger contingent liabilities related to legal, regulatory, tax, and other issues of both companies merging.
Under the Contingent Liability Adjustment Mechanism, Vodafone’s maximum liability capped at Rs 8,369 crore during the merger. After considering payments already made, the reduced liability set at Rs 6,394 crore. The deadline for the agreement, after an extension, on 31 December 2025. Based on the revised terms of the Implementation Agreement, Vodafone Idea is now due to receive Rs 5,836 crore, according to the filing.
Read also: Indian Tobacco Stocks Drop After Steep Cigarette Excise Duties