According to recent reports in the Indian press, the merger between Bharti Infratel and Indus Tower, which would have created one of the world’s largest telecom tower companies, has been delayed.
The news came early this week via an announcement from the board of Bharti Infratel, which said the October 24 merger deadline could not be met, as a number of government approvals were still needed.
What happens next is unclear. Vodafone Idea, its parent company the Vodafone Group and Bharti Airtel are joint owners of Indus Towers. Being unable to divest its stake in the merged entity would be a problem for Vodafone Idea in particular, which owns an 11.15 percent stake in Indus Towers. The return from the sale would have injected a much-needed cash boost at a challenging time for the operator, which needs to fund network expansion, given continuing competition from Airtel and Reliance Jio.
Bharti Airtel and Vodafone Plc currently have 42 percent stakes each in Indus Towers. This would be reduced to 37.2 percent and 29.4 percent respectively after the merger. Smaller stakes are owned by KKR, Canada Pension Plan Investment Board and Providence Equity Partners. Press reports have suggested that Providence Equity Partners may sell its stake in the event of a merger.
For the moment, however, this is all on hold as both the market and stakeholders await a decision from the Bharti Infratel board.
