New Delhi, Feb 24 (SocialNews.XYZ) Bharti Infratel on Monday extended the deadline for the closure of its merger with Indus Towers by another two months to April 24 and said that the final decision to implement the deal will take into account the impact of the current AGR crisis on the company, shareholders and its major customers.
"Since the other actions/conditions precedent to be fulfilled for the scheme to become effective cannot be completed by the extended Long Stop Date, i.e. February 24, 2020, the Board of Directors have further extended the date till April 24, subject to an agreement on closing adjustments and other conditions precedent for closing, with each party retaining the right to terminate and withdraw the scheme," Infratel said in a statement to the exchanges on Monday.
"The final decision to implement the scheme will be taken by the Board keeping in mind the best interests 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," the company added.
Reacting to the extension decision, Shares of Infratel, India's only listed tower company, were down to Rs 211.60 (6.45 per cent).
The deal is expected to be cleared by the National Company Law Tribunal-Chandigarh and then the Registrar of Companies will take it on record, which might take two to three months.
The merger deal, announced in April 2018, received a crucial approval from the DoT for the foreign direct investment on Friday.
Under the Bharti Infratel-Indus merger terms, cash-strapped Vodafone Idea has the option to sell its entire 7 per cent stake which it will get in the merged entity to the shareholders for cash, based on an agreed formula. VIL is expected to generate about Rs 4,500 crore via this route. The timely approval of DoT for this deal was seen as a relief step from the government towards the telcos to monetise their stake in the wake of the pending dues of AGR.
Indus Towers is co-owned by Bharti Infratel, UK's Vodafone Group Plc and VIL, with the first two holding 42 per cent each. VIL owns 11.15 per cent while the remaining 4.85 per cent is with the private equity firm Providence.
Bharti Airtel has a majority stake in Bharti Infratel. After VIL's exit, Bharti Airtel and Vodafone Plc are expected to hold 37.2 per cent and 29.4 per cent respectively in the merged entity.
VIL can also sell the stake to a third party. But under the current circumstances Vodafone Idea can look at selling the stake to some existing shareholders under a pre-agreed formula.
Source: IANS
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