VODA­FONE-IDEA NEEDS DOT, NCLT NOD

Financial Chronicle - - FRONT PAGE - AN­JANA DAS

Voda­fone In­dia and Idea Cel­lu­lar will have to get no-ob­jec­tion nod from the tele­com de­part­ment and the Na­tional Com­pany Law Tri­bunal (NCLT) for sell­ing stake in their re­spec­tive tower busi­nesses as the deal in­volves cash in­flows into their bal­ance sheets, of­fi­cial sources said. Both Voda­fone and Idea are al­ready in the midst of a merger agree­ment.

Voda­fone In­dia and Idea Cel­lu­lar will have to get no-ob­jec­tion nod from the tele­com de­part­ment and the Na­tional Com­pany Law Tri­bunal (NCLT) for sell­ing stake in their re­spec­tive tower busi­nesses as the deal in­volves cash in­flows into their bal­ance sheets, of­fi­cial sources said.

Both Voda­fone and Idea are al­ready in the midst of a merger agree­ment and their de­ci­sion to un­der­take third party sale of their re­spec­tive tower busi­nesses will need vet­ting by DoT and NCLT.

Sources said both the com­pa­nies may have ex­pressed their in­tent to go for this ex­er­cise ear­lier, but now that this has taken place, the DoT will need to record this fi­nan­cial trans­ac­tion and ap­prove it. The com­pa­nies will also have to place this deal be­fore the NCLT. In fact, DoT will also wait for the NCLT re­sponse be­fore giv­ing its views, sources added.

If the deal is closed within the time pe­riod given by the com­pa­nies, the clo­sure will also need DoT ap­proval but NCLT's per­mi­si­son at that stage would not be re­quired. Any fresh or ac­tual de­vel­op­ment dur­ing the time pe­riod of a merger would manda­to­rily need a new set of nods, they added.

Voda­fone In­dia and Idea Cel­lu­lar on Sun­day said that they had sep­a­rately agreed to sell their re­spec­tive stand­alone tower busi­nesses in In­dia to Amer­i­can Tele­com Com­pany In­fra­struc­ture Pri­vate Ltd (ATC TIPL) for an ag­gre­gate en­ter­prise value of Rs 7,850 crore, or $1.2 bil­lion. Both tel­cos are cur­rently in the mid­dle of their pro­posed merger, which is ex­pected to be com­pleted in 2018. The merger is cur­rently await­ing ap­proval from NCLT.

Idea Cel­lu­lar has al­ready ap­proached for NCLT for its merger with Voda­fone and both the com­pa­nies have got con­di­tional nod from mar­ket reg­u­la­tor Sebi and ap­proval from ex­changes–BSE and NSE. Re­cently Idea share­hold­ers also ap­proved the merger with Voda­fone.

The com­pa­nies have said in the event that the com­ple­tion of the sale of the stand­alone tower busi­nesses pre­cedes the com­ple­tion of the pro­posed merger of Voda­fone In­dia and Idea, Voda­fone In­dia will re­ceive Rs 3,850 crore, or $592 mil­lion, and Idea will re­ceive Rs 4,000 crore ($615 mil­lion).

Newspapers in English

Newspapers from India

© PressReader. All rights reserved.