Vodafone Group on Wednesday announced it has made an accelerated payment of $200 million to Vodafone Idea under the terms of the contingent liability mechanism with Vodafone Idea. The payment was due in September 2020.
Under the terms of CLM, the UK-based Group is obliged to make payments to Vodafone Idea where amounts paid pursuant to the contingent liabilities of the company exceed those of Idea Cellular.
The CLM took effect at completion of the merger of Vodafone India and Idea Cellular in August 2018, the Group said in a statement.
The payment is to provide Vodafone Idea with liquidity to manage its operations, and to support its nearly 300 million Indian customers, as well as, employees during this phase of health emergency due to COVID-19 outbreak, it said.
Following the decision by the Supreme Court on definition of adjusted gross revenue or AGR in October 2019, India’s telecom operators became liable for licence fees, penalties and interest dating back over 14 years.
Vodafone Idea has made payments to the Government of India in relation to its AGR liabilities, Vodafone said.