Merger of Bharti Infratel, Indus hangs in balance
NEW DELHI: The merger of Bharti Infratel and Indus Towers, pegged to create the world’s second-largest tower company, hangs in the balance with the companies awaiting a key government approval on foreign direct investment
The board of Bharti Infratel, a unit of Bharti Airtel Ltd, will meet on Tuesday and is likely to decide on a second extension for the current long stop date so that the companies can secure the approval and complete their merger announced in April 2018
“If the board feels more time is needed (to secure government approval), then it (long stop date) may be extended further or else various other options can be looked at,” said a person familiar with the matter, who requested anonymity Bharti Infratel had in October extended the long stop date to 24 December
The merger is crucial as it will help loss-making Bharti Airtel and Vodafone Idea, the promoters of Indus Towers, sell stake to raise funds in the competitive telecom sector, especially at a time when they have to pay huge dues to the Department of Telecommunications (DOT) after an unfavourable court verdict in October Bharti Airtel has set aside ₹34,260 crore and Vodafone Idea has made provisions for ₹25,6779 crore in the September quarter after the Supreme Court upheld the government’s definition of revenue based on which telecom firms pay levies
“Since the merger (of Bharti Infratel and Indus Towers) is contingent upon receipt of regulatory approvals and fulfilment of other conditions, there can be no assurance that the process can be completed within the extended time-frame,” Bharti Infratel had informed the BSE in October
“There are high chances that the deal could fall through and then all shareholders will have to monetize towers assets separately,” said another person aware of the matter, requesting anonymity
DOT and Vodafone Idea did not respond to emailed queries A spokesperson for Bharti Airtel declined to comment