Vodafone Idea surged 11.62% to Rs 4.42 after Vodafone Group announced that it has accelerated a payment of $200 million to Vodafone Idea, which was due in September 2020.
The UK-based telecommunications company said that the payment is being done under the terms of the contingent liability mechanism (CLM) with Vodafone Idea.
Vodafone Group has accelerated this payment to provide Vodafone Idea with liquidity to manage its operations, and to support the approximately 300 million Indian citizens who are Vodafone Idea customers as well as the thousands of Vodafone Idea employees during this phase of emergency health measures, taken as a result of the COVID-19 pandemic.
Under the terms of the CLM, Vodafone Group is obliged to make payments to Vodafone Idea where amounts paid pursuant to the contingent liabilities of Vodafone India exceed those of Idea Cellular. The CLM took effect at completion of the merger of Vodafone India and Idea Cellular in August 2018.
Vodafone Telecommunications (India), subsidiary of UK-based Vodafone Group, held 5.65% stake in Vodafone Idea as on 31 March 2020.
The stock has recovered 69.34% from its 52-week low of Rs 2.61 hit on 15 November 2019.
On a consolidated basis, Vodafone Idea reported a net loss of Rs 5,807.24 crore in Q3 December 2019 as against a net loss of Rs 4,203.97 crore in Q3 December 2018. Net sales fell 5.75% to Rs 11,076.20 crore in Q3 December 2019 over Q3 December 2018.
Vodafone Idea operates as a telecom service provider. The company offers 2G, 3G, and 4G mobile services, as well as mobile payments, advanced enterprise offerings, and entertainment.
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