During its FY23 earnings announcement, Vodafone Plc revealed that the carrying value of its investment in Vodafone Idea (Vi) is now zero. The company also stated that it will no longer record any further losses related to Vi. However, Vi continues to face financial challenges and requires additional liquidity. Vi intends to raise funds in the future to address its ongoing troubles.

In its FY23 report, Vodafone Plc acknowledged that Vodafone Idea Limited (VIL) still requires additional liquidity support from its lenders. VIL also expressed its intention to raise additional funding to address its financial needs.

Vodafone Plc stated that there are significant uncertainties regarding Vodafone Idea Limited’s (VIL) ability to make payments for remaining liabilities, and as of March 31, 2023, no further cash payments from the Group are deemed probable. The carrying value of the Group’s investment in VIL is now zero, and the Group is not recording any additional share of losses related to VIL.

According to Vodafone Plc, when Vodafone and Idea Cellular merged in 2017, they established a mechanism for payments between the Group and Vodafone Idea (VIL) relating to contingent liabilities. This mechanism is based on the crystallization of specific identified liabilities, refunds, and cash payments or receipts made by VIL.

As a result, any future payments from the Group to VIL would only occur after the fulfillment of these contractual conditions. Vodafone Group’s potential liabilities in relation to VIL are limited by this mechanism, which means that contingent liabilities arising from litigation in India regarding the operations of Vodafone India are not reported.