NEW DELHI: The Bharti Infratel board on Tuesday approved the long-pending merger with Indus Towers Ltd, first announced in April 2018, to create the world’s largest mobile tower operator outside China. The deal will allow cash-starved Vodafone Idea Ltd to divest 11.5% stake in Indus Towers for ₹4,000 crore, Bharti Infratel said in a statement.
The tower subsidiary of Bharti Airtel Ltd had extended the long-stop date of merger with Indus Towers six times citing incomplete details for the approval.
The merged entity will be called Indus Towers that was so far a three-way joint venture among Bharti Infratel, Vodafone Idea and UK-based Vodafone Group. Both Bharti Infratel and Vodafone held 42% stake each in Indus Towers.
With the merger, Vodafone will own 28.2% stake, while Bharti Infratel will hold 68.6% in Indus Towers. Provident Equity Partners (PEP), which was an investor in Indus Towers, has been issued fresh shares totalling 3.2% stake in the combined entity.
The transaction is subject to approval of the National Company Law Tribunal (NCLT), Bharti Infratel said in the statement.
The proceeds from the divestment of Vodafone Idea’s stake in Indus Towers will help the telco partly pay its adjusted gross revenue (AGR)-related dues. Bharti Infratel had earlier expressed concerns over Vodaphone Idea’s sustainability hinging upon the Supreme Court’s decision on staggered payment of AGR dues. The judgment will be passed on Tuesday.