Bharti Airtel posted a massive net loss of ₹22,830.1 crore for the quarter ended September 30 due to the ‘significant financial implication’ following the recent Supreme Court ruling in favour of the Department of Telecom’s interpretation of adjusted gross revenues (AGR).
For the quarter, the company, which had posted net profit of ₹249.2 crore in Q2 of last year, recognised exceptional items of ₹22,394.4 crore (net of tax). It provided for an additional amount of ₹28,450 crore for licence fee as estimated based on the apex court judgment and spectrum usage charges as estimated based on the definition of AGR.
“ These provisions have been made without prejudice to the company’s right to contest DoT’s demands on facts as well as on rights available in law,” it said, adding it was hopeful of relief. The Supreme Court, in its order on October 24, ruled in favour of DoT, while directing telecom operators to pay their statutory dues within three months. The firm’s consolidated revenue was ₹21,131 crore, up 5%. Following the provisions, it said the liabilities/provisions as at September 30, 2019, were ₹34,260 crore. This comprises principal of ₹8,747 crore, interest of ₹15,446 crore, penalty of ₹3,760 crore and interest on penalty of ₹6,307 crore. “On the AGR verdict of the Supreme Court, we continue to engage with the government and are evaluating various options available to us. We are hopeful that the government will take a considerate view in this matter given the fragile state of the industry,” Gopal Vittal, MD and CEO, India & South Asia, said. “The management is reviewing its options and remedies available, including filing petitions before the Supreme Court and also seeking other reliefs, with others affected in the industry, from the government,” the company said.
In a regulatory filing, it said the group would need significant additional financing to discharge its obligations under the court judgment. “The group has an established track record of accessing diversified sources of finance across markets and currencies. However, there can be no assurance of the success of management’s plans to access additional sources of finance to the extent required, on terms acceptable to the Group, and to raise these amounts in a timely manner.”
“This represents a material uncertainty whereby, it may be unable to realise its assets and discharge its liabilities in the normal course of business, and accordingly may cast significant doubt on the Group’s ability to continue as a going concern,” it added.
