Is the long-delayed Bharti Infratel-Indus Towers merger finally nearing completion? There are hints that a new approach could resolve what is now a two-year-old issue.
Indian press reports are now suggesting that the proposed merger of Bharti Infratel and Indus Towers is likely to be completed after all sides recently agreed that a change to the deal would be acceptable.
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 means Vodafone Idea and Providence Equity Partners, an investor in Indus Towers, will be issued fresh shares in the merged entity – assuming, of course, that everything now goes ahead smoothly. The merger was first announced over two years ago. Next, the shareholders need to get final approval of the merger from the National Company Law Tribunal in Chandigarh.
The other important point relating to this agreement is that Vodafone Idea had been hoping that the tower merger deal would go through soon in order to raise a large sum from the sale of its stake in the combined entity. This in turn could be used to pay a portion of its AGR dues, which, in total, come to some $7.5 billion. It’s not clear whether the new arrangement will allow Vodafone idea to access this sum or, if it does, how quickly.