New Delhi: Bharti Infratel extended Monday the deadline for its merger with Indus Towers by two more months to April 24, but cautioned that final call on scheme implementation will be taken by the board based on assessment of the ongoing AGR-crisis and its impact on customers.
The delay in completion of the deal, would come as a blow to Vodafone Idea which has to cough up Rs 53,000 crore in statutory dues to the government and was eyeing about Rs 5,500 crore from stake sale in Indus Towers.
Vodafone Idea has so far paid Rs 3,500 crore towards statutory dues, and any monetisation exercise would allow it to get closer to at least the principle AGR amount, it owes to the government.
“The final decision to implement the scheme will be taken by the board keeping in mind the best interest of the company and its stakeholders including the assessment of the current crisis facing the telecom industry and the extent of its impact on the company’s major customers,” Bharti Infratel said in a regulatory filing.
The company said that although the foreign direct investment (FDI) approval for the merger with Indus Towers had been received, the long stop date (deadline) has been extended as other actions and conditions precedent to be fulfilled for the scheme to become effective cannot be completed by the previously stated deadline of February 24.
“…The board of directors has further extended long stop date till April 24, 2020, subject to agreement on closing adjustment and other conditions precedent for closing, with each party retaining the right to terminate and withdraw the scheme,” the company said.
The company will also have to seek approval of the National Company Law Tribunal (NCLT), Chandigarh, and Registrar of Companies now, sources said.
The delay would certainly worry Vodafone Idea as it has so far paid only seven per cent of its dues in two tranches. It was expected that Vodafone will get around Rs 5,500 crore from stake sale in Indus Towers.
Bharti Infratel and Vodafone hold 42 per cent stake each in Indus. Vodafone Idea holds 11.15 per cent stake in the mobile tower firm.
Bharti Infratel had last week said that its board of directors will meet on February 24 to “take stock and decide the future course of action”, following the FDI approval that came in from Telecom Department.
It was in April 2018, that Bharti Airtel, Idea Cellular and Vodafone Group had announced an agreement for the merger of Indus Towers and Bharti Infratel to create the largest mobile tower operator in the world, outside China.
Once the merger is completed, the telecom tower juggernaut would have over 1,63,000 towers across 22 telecom service areas in India
As per the original plans, the combined company, which would fully own the respective businesses of Bharti Infratel and Indus Towers, would change its name to Indus Towers Ltd and will continue to be listed on Indian stock exchanges.