Active Stocks
Tue Mar 19 2024 14:31:08
  1. Tata Consultancy Services share price
  2. 3,986.00 -3.83%
  1. Tata Steel share price
  2. 149.55 -0.03%
  1. Bharti Airtel share price
  2. 1,234.25 0.75%
  1. Power Grid Corporation Of India share price
  2. 260.00 -1.89%
  1. ITC share price
  2. 409.90 -1.80%
Business News/ Companies / News/  Vodafone lenders approve Indus Towers, Bharti Infratel merger deal
BackBack

Vodafone lenders approve Indus Towers, Bharti Infratel merger deal

Vodafone’s stake in Indus Towers will reduce from 42% to 28.2% while Bharti Infratel will now own 68.6%

Vodafone Idea will divest its entire 11.15% stake in the merged entity. MintPremium
Vodafone Idea will divest its entire 11.15% stake in the merged entity. Mint

Lenders to Vodafone Group Plc. have approved the merger of Indus Towers Ltd and Bharti Infratel Ltd, the UK-based company said on Monday.

The agreement to proceed on the deal has been given on the condition of a consent for a security package for the merged entity from Vodafone’s existing lenders, it said. The consent was sought on the €1.3 billion loan used to fund Vodafone’s contribution to the Indian arm Vodafone Idea Ltd’s rights issue in 2019.

Vodafone’s stake in Indus Towers will reduce from 42% to 28.2% with the merger. Bharti Infratel, which also held a 42% stake, will now own 68.6%. Indus Towers was a three-way joint venture among Bharti Infratel, Vodafone Group and Vodafone Idea.

Vodafone Idea will divest its entire 11.15% stake in the merged entity, which will also be called Indus Towers.

Provident Equity Partners (PEP), which was an investor in Indus Towers, will be issued 3.2% fresh shares in the combined entity.

The transaction, first announced in April 2018 is subject to approval of the National Company Law Tribunal. It will be the world’s largest mobile tower firm outside China.

Bharti Infratel, the tower subsidiary of telecom major Bharti Airtel Ltd, had extended the long-stop date of merger with Indus Towers six times, citing incomplete details for the approval. Bharti Infratel’s board approved the merger on 1 September.

The proceeds from the divestment of Vodafone Idea’s stake in Indus Towers will help the financially-stressed telco to partly pay its adjusted gross revenue (AGR)-related dues to the government.

On 1 September, the Supreme Court had granted 10 years to telecom operators to pay their AGR dues, which include interest, penalty and interest on penalty. The dues also include spectrum usage charges and licence fees levied by the government.

Vodafone Idea has cleared 7,854 in AGR dues, but still owes more than 50,000 crore to the department of telecommunications . The telco needs fresh equity, higher tariff and concession on various government levies to continue operations, said telecom experts.

Unlock a world of Benefits! From insightful newsletters to real-time stock tracking, breaking news and a personalized newsfeed – it's all here, just a click away! Login Now!

Catch all the Corporate news and Updates on Live Mint. Download The Mint News App to get Daily Market Updates & Live Business News.
More Less
Published: 05 Oct 2020, 01:09 PM IST
Next Story footLogo
Recommended For You
Switch to the Mint app for fast and personalized news - Get App

Chat with MintGenie