Bharti Infratel, Indus merger complete; VIL gets ₹3,760 cr in cash for 11.15% holding in Indus

As promoters of the new company, Vodafone Group will hold 28.12% stake (in the merged entity) while the holding of Bharti Airtel Group will be about 36.7%.

The merger of Bharti Infratel and Indus Towers to create a mega tower company has been completed, and debt-ridden Vodafone Idea Ltd. (VIL) has received about ₹3,760 crore cash for its 11.15% holding in Indus, according to a regulatory filing.

As promoters of the new company, Vodafone Group will hold 28.12% stake (in the merged entity) while the holding of Bharti Airtel Group will be about 36.7%.

“…the Board has allotted 757,821,804 equity shares of ₹10 each to the Vodafone group and 87,506,900 equity shares of ₹10 each to PS Asia Holding Investments (Mauritius) Limited (Providence) aggregating to 28.12% and 3.25% respectively in the post-issue share capital of the company,” Bharti Infratel said in a regulatory filing on the evening of November 19.

It further said the merger of Indus and Infratel “has been completed”, and added that Vodafone Idea has received cash consideration of ₹3,760.1 crore for its 11.15% shareholding in Indus.

“…subsequent to filing of the NCLT orders by the respective companies with the Registrar of Companies today…November 19, 2020, the Scheme has become effective on even date and the merger of lndus and Infratel has been completed,” the filing said.

VIL had elected to receive cash pursuant to the right available to certain shareholders.

“…VIL has received cash consideration of ₹37,601 million for its 11.15% shareholding in Indus,” it said, adding the said transaction had been executed and completed on November 19.

Prior to the merger with Indus, Bharti Infratel held 42% stake in the mobile tower firm (Indus Towers), which was a three-way joint venture with British telecom giant Vodafone and Vodafone Idea having 42% and 11.15% stake, respectively.

Bimal Dayal has been named as the CEO of the merged entity.

“…the Board has proposed appointment of Bimal Dayal as Managing Director and CEO of the Company to be made effective from the date of approval of the shareholders of the company,” it said, adding the company will follow the due process for seeking shareholders’ nod shortly.

The merged entity will be renamed ‘Indus Towers Limited’. “…the change of name will be subject to the company complying with all the statutory filing requirements under the Companies Act, 2013 for placing the change of name in the Register of Companies,” it said.

The same will be intimated to the stock exchanges upon completion of the process, the filing added.

The board of directors of the company will also be re-constituted, and accordingly, Akhil Gupta, executive chairman (of Bharti Infratel) and few of the independent directors have resigned from the board.

The board, based on the recommendation of the HR, Nomination and Remuneration Committee, has approved the appointment of some additional directors, including Gopal Vittal, Harjeet Kohli, Ravinder Takkar and Balesh Sharma as non-executive non-independent directors.

The latest move to sell its 11.15% stake in Indus will come as a breather to Vodafone Idea, which is facing more than ₹58,000 crore demand in overall statutory dues after the Supreme Court last year ordered non-telecom revenues to be included in calculating statutory liabilities.

VIL has made payment of about ₹7,850 crore so far towards its statutory dues.

The apex court has directed telecom operators to pay 10% of their total Adjusted Gross Revenue (AGR)-related dues this year, and the rest in 10 instalments starting from next fiscal.

In a separate filing on November 19, VIL said, it “has sold its 11.15% stake in Indus for a cash consideration of ₹37.6 billion in accordance with the terms of the agreement and out of the consideration received from Infratel, the company has made a prepayment of ₹24 billion which will be adjusted in line with terms of the agreement.”

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