Vodafone Idea jumps over 4% on Bharti Infratel-Indus Towers merger1 min read . Updated: 20 Nov 2020, 09:49 AM IST
- Bharti Infratel board on 1 September approved the long-pending merger with Indus Towers, first announced in April 2018, to create the world’s largest mobile tower operator outside China
Shares of Vodafone Idea Ltd on Friday rallied over 4% in the early trade, as the cash-strapped telecom operator received ₹3,760 crore after selling 11.15% stake in Indus Towers. The stake sale was part of the merger between Bharti Infratel Ltd and Indus Towers. The proceeds from the divestment will allow the telco to partially pay its government dues.
At 9:41am, the scrip traded at ₹9.63 apiece on the BSE, up 3.88% from its previous close, while the benchmark Sensex advanced 0.48% at 43,807.72 points.
The rally was also supported by talks of a consortium of investors comprising US-based Oaktree Capital Management and Varde Partners proposing to invest up to $2.5 billion in Vodafone Idea that owes more than ₹50,000 crore to the department of telecommunications in adjusted gross revenue (AGR) dues.
Bharti Infratel board on 1 September approved the long-pending merger with Indus Towers, first announced in April 2018, to create the world’s largest mobile tower operator outside China. The deal was completed on Thursday, Bharti Infratel said in an exchange filing.
The tower subsidiary of Bharti Airtel Ltd had extended the long-stop date of merger with Indus Towers six times citing incomplete details for the approval.
The merged entity will be called Indus Towers that was so far a three-way joint venture among Bharti Infratel, Vodafone Idea and UK-based Vodafone Group PLC. Both Bharti Infratel and Vodafone held 42% stake each in Indus Towers.
With the merger, Vodafone will own 28.2% stake, while Bharti Infratel will hold 68.6% in Indus Towers. Provident Equity Partners (PEP), which was an investor in Indus Towers, has been issued fresh shares totalling 3.2% stake in the combined entity.
Vodafone Idea is the largest customer of the merged firm, Indus Towers.