Vodafone Idea clearing dues to banks first to avoid a visit to bankruptcy court: Experts

Kolkata: Loss-making Vodafone Idea (Vi) is prioritising clearing its dues to banks and financial institutions over vendor payments to possibly avoid getting dragged to the bankruptcy court, if the telco was to face such a situation in the future, industry executives and legal experts said.

The cash-strapped telecom operator, they said, would be aware that banks, in their capacity as financial creditors, could directly take a company that had defaulted on a payment to the National Company Law Tribunal (NCLT), which is the dedicated bankruptcy court, without any prior notice under the Insolvency & Bankruptcy Code. Vendors, who are operational creditors, however, will have to follow a lengthier process that involves several steps to initiate bankruptcy proceedings against a client.