“FDI approval for merger of Indus Towers Ltd with Bharti Infratel Ltd has been acquired late night yesterday (Friday)…the board of administrators of the corporate will meet on Monday (i.e. February 24) to take inventory and determine the longer term plan of action,” Bharti Infratel mentioned in an change submitting Saturday.
ET had reported in its February 22 version that the businesses had acquired the essential international direct funding (FDI) nod from the federal government for the merger deal. Merger closure had been hanging fireplace for months as DoT had reportedly held in abeyance the FDI approval because of a Rs 22,000 crore withholding tax dispute between UK’s Vodafone Group and India.
Loss-making Vodafone Idea has been banking on this tower merger deal closure to boost roughly Rs 4,500 crore from the sale of its stake within the mixed entity, which might be used to pay a portion of its adjusted gross income (AGR) dues.
DoT estimates present Vodafone Idea must shell out Rs 56,709.49 crore in the direction of its statutory AGR dues, of which it has already paid Rs 3,500 crore. The telco, nonetheless, estimates its dues a lot decrease at some Rs 23,000 crore, of which Rs 7,000 crore is the principal.
The authorities, on its half, is believed to be additionally engaged on all choices, together with deferring service dues apart from AGR liabilities, to make sure Vodafone Idea, isn’t compelled to close, the telecom sector stays viable and no jobs are misplaced.
The Bharti Infratel and Indus Towers merger deal was signed on April 2018, and the deal was to have been concluded by October 2019. Subsequently, the businesses prolonged the deal initially by two months to December 24, 2019, and one other two months to February 24, in absence of DoT approval.
Indus Towers is a three-way three way partnership between Bharti Infratel, UK-based Vodafone Group Plc and Vodafone Idea, with the primary two holding 42% every. Vodafone Idea owns 11.15% whereas the remaining 4.85% is with personal fairness agency, Providence. Bharti Airtel has a majority stake in Bharti Infratel.
Assuming Vodafone Idea exits, Bharti Airtel and Vodafone Group are anticipated to carry 37.2% and 29.4%, respectively, within the merged towers entity as per phrases of the deal introduced in April 2018.
The delayed Bharti Infratel-Indus merger had made issues immensely powerful for struggling Vodafone Idea to boost money to pay a slice of its AGR dues, and in flip, decreased its survival prospects. Merger approval, in that sense, is probably going to offer a short lived reprieve to the loss-making telco.
if(geolocation && geolocation != 5 && (typeof skip == 'undefined' || typeof skip.fbevents == 'undefined')) !function(f,b,e,v,n,t,s) if(f.fbq)return;n=f.fbq=function()n.callMethod? n.callMethod.apply(n,arguments):n.queue.push(arguments); if(!f._fbq)f._fbq=n;n.push=n;n.loaded=!0;n.version='2.0'; n.queue=;t=b.createElement(e);t.async=!0; t.src=v;s=b.getElementsByTagName(e); s.parentNode.insertBefore(t,s)(window, document,'script', 'https://connect.facebook.net/en_US/fbevents.js'); fbq('init', '338698809636220'); fbq('track', 'PageView');