Idea-Vodafone merger approved, formalities pending, says Sinha
Telecom minister Manoj Sinha said on Wednesday that the government has approved the Idea Cellular and Vodafone India merger, the sector’s biggest, but the companies need to complete some formalities for the final closure of the deal.
“We have already approved merger of Idea-Vodafone. There are some formalities which are pending that they have to complete for it (the merger),” Sinha told reporters on sidelines of a BSNL event—the first on-record confirmation from the government side.
Top management of Vodafone, the British telecom firm, met the minister yesterday after the deal was given conditional approval by the department of telecom on July 9.
“They met me and to thanked that we have done it very quickly,” Sinha said.
Vodafone CEO designate and chief financial officer Nick Read, after meeting Sinha, had on Tuesday confirmed receiving the letter approving the merger. “We are happy to receive the letter,” he had said.
There have been industry speculations that Idea Cellular and Vodafone may challenge in court the demand of ₹3,976 crore for one time spectrum charge of Vodafone India, and joint bank guarantee of ₹3,342 crore sought by DoT before it grants final approval for the merger.
Vodafone executives did not respond to queries over their plans to make payment and furnishing bank guarantee. Vodafone CEO Vittorio Colao, who will remain in office till October, said: “Yes. I am optimistic” that the new entity, to be named Vodafone Idea Ltd, will be in place before he remits the office.”
When asked for plans of the British telecom firm post the new entity comes in place, Read said: “We have always been a strong investor in India. We will remain that”.
The combined operations of Idea and Vodafone will create the country’s largest telecom operator worth over $23 billion (or over ₹1.5 lakh crore), with a 35% market share and a subscriber base of around 430 million.
Outgoing chief economic adviser (CEA) Arvind Subramanian will brief a parliamentary panel on the issue of mounting non-performing assets on Tuesday.
While the Enforcement Directorate (ED) and Central Bureau of Investigation (CBI) have also been summoned by the panel to discuss the matter, a date for the same is yet to be decided, people familiar with the matter said. The parliament’s committee on estimates, headed by veteran BJP leader Murli Manohar Joshi, was on Tuesday briefed by senior finance ministry officials, including Hasmukh Adhia and deputy governors of the RBI.
Members of the panel posed a number of questions over the rising non-performing assets (NPAs) and crisis in the banking sector, the people said. During the meeting, which lasted for more than four hours, the members demanded various documents including minutes of the board meetings of the public sector banks, in which high-ticket value loans were approved. The people said ED director Karnal Singh and CBI director Alok Verma will also brief the panel on the issue. The investigating agencies have been called as they are probing various cases of NPAs and complaints against senior bank officials related to sanctioning of loans.
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