Bankrupt Videocon’s AGR dues cloud Bharti Airtel

The burden of paying AGR (adjusted gross revenues) dues of Videocon Telecommunications Ltd may fall on Bharti Airtel, if one were to go by the proceedings at the Supreme Court on Friday. The court observed that Airtel, which under a trading pact with the bankrupt company, is using the spectrum given to it, will have to the pay the AGR dues of the telco undergoing insolvency proceedings.

The three-judge bench, headed by Justice Arun Mishra, said the spectrum trading guidelines mandate clearance of past dues before the transfer of the radio airwaves to a new buyer under the Insolvency and Bankruptcy Code (IBC). If the bankrupt company that holds the spectrum does not pay the AGR dues, its user clears the dues, the court said.

Videocon has sold its access spectrum in the 1800 megahertz band to Airtel, which itself owes ₹43,980 crore in AGR dues. Airtel had also bought the airwaves held by another bankrupt telco Aircel Group. While Aircel owes ₹12,289 crore in AGR dues, Videocon has a liability of ₹1,376 crore. If the apex court directs the telcos using spectrum of bankrupt companies to pay the past dues, then both Airtel and rival Reliance Jio Infocomm Ltd will be hit hard.