Bharati Infratel to merge with Indus Towers; Vodafone Idea to sell 11.15 pc Indus stake

Bharti Infratel Ltd on Tuesday announced that it will go ahead with its long-delayed merger with Indus Towers - the telecom infrastructure firm. Bharti Infratel will hold a majority share in the merged entity with a stake of 68.6 percent, while London-listed Vodafone Group Plc will hold 28.2 percent, the company said. Vodafone Idea Ltd (VIL) will cash in by selling its 11.15 percent stake in Indus Towers for an approximate Rs 4,000 crore, Infratel said.

According to Infratel the likely ownership structure of the merged towers entity is based on cash consideration chosen by VIL for its 11.15 percent shareholding in Indus which is based on an agreed formula. The estimated calculation of the cash consideration comes to approximately Rs 4,000 crore, the company said.

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After holding discussions in the meeting held on Monday, August 31, the board of directors took note of the status of scheme of arrangement between Indus Towers and Bharti Infratel and related agreements. The board has decided to authorise the chairman to proceed with the scheme and to comply with other procedural requirements for completion of the merger. This includes approaching the National Company Law Tribunal (NCLT) to make the scheme effective subject to certain procedural condition precedents, Bharti Infratel said in a regulatory filing on Tuesday.

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VIL’s decision to cash in on Indus came just a few hours before the Supreme Court is slated to give the final verdict in the adjusted gross revenue (AGR) case on Tuesday. The Apex court had reserved its order on the period over which such AGR payment could be made, and under what conditions, having underlined that no reassessment of the telecom department’s AGR demand would be allowed. 

Bharti Infratel added that the merger scheme will become effective on the date on which a certified copy of the order of NCLT is filed with the Registrar of Companies. The effective date would be communicated to the stock exchanges for further public dissemination as and when the scheme becomes effective, it added. Infratel had announced the deal with Indus Towers in 2018 to form a $14.6-billion telecom tower giant.

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