The Bharti Infratel board will meet on Monday to decide the future course of action after it received the Department of Telecommunication’s (DoT) approval for foreign direct investment (FDI) for the merger with Indus Towers, according to a filing to the stock exchange on Saturday.
“The FDI approval for the merger of Indus Towers with Bharti Infratel has been received late yesterday (Friday) evening. The board of directors will meet on Monday to take stock and decide the future course of action,” Bharti Infratel informed the stock exchange.
The merger closure had been held up as the DoT had held in abeyance the FDI approval due to a Rs 22,000 crore withholding tax dispute between UK”s Vodafone Group and India.
The merged entity will be the world”s largest telecom tower company with over 1,63,000 towers.
The closure of the merger deal also enables Vodafone Idea to raise funds for clearing a part of its adjusted gross revenue (AGR) dues to the government. Loss-making Vodafone Idea can expect to raise roughly Rs 4,500 crore from the sale of its stake in the combined entity.
Vodafone Idea needs to pay Rs 56,709.49 crore statutory AGR dues. Of this, the company has paid Rs 3,500 crore. The telco, however, estimates its dues much lower at some Rs 23,000 crore, of which Rs 7,000 crore is the principal.
Indus Towers is a three-way joint venture between Bharti Infratel, Vodafone Group and Vodafone Idea, with the first two holding 42 per cent each. Vodafone Idea owns 11.15 per cent and the rest 4.85 per cent is with private equity firm Providence.
Bharti Airtel and Vodafone Group are expected to hold 37.2 per cent and 29.4 per cent, respectively, in the merged entity as per the terms of the deal announced in April 2018.