It’s less than a month since we asked whether an agreed change to the deal meant that the long-delayed Bharti Infratel-Indus Towers merger could be nearing completion. Now that Bharti Infratel’s board is planning a meeting on 11 June to discuss the merger it may be that the end really is near.
After a meeting on 3 June the Bharti Infratel board of directors announced a decision to meet on 11 June “to take the final decision on the matter”. If the Bharti Infratel and Indus Towers merger does go ahead, it will allow the partners to create one of the world’s biggest telecommunications tower companies, an entitity owning some 169,000 towers.
And yet the apparently unending saga still won’t be over, even if the board is happy with it. The deal still needs to be cleared by the National Company Law Tribunal-Chandigarh and then taken on record by the Registrar of Companies. It has already received foreign direct investment (FDI) approvals.
The original plan involved Bharti Infratel acquiring Vodafone Idea’s entire 11.15 percent stake in Indus Towers for about $594 million. Now, it appears, the main shareholders, Bharti Group and Vodafone, are going for a share-swap arrangement.
This, Indian press reports suggest, is because the cash payout to Vodafone Idea and Providence – stakeholders in Indus – would be lower if it was based on the cash exit option. It seems that, in the two years since the merger was first announced, the calculations have changed, possibly due to a reduced number of operators and less tower sharing. Still, an estimated $596 million payout, if Vodafone Idea decides to cash in its stake immediately, will no doubt be a very welcome boost to the cash-strapped operator’s finances.