New Delhi: The board of Bharti Infratel on Tuesday again allowed more time to the company to secure a key government approval for its merger with Indus Towers. The company’s board had in October extended the long stop date to December 24 in order for the companies to secure this approval, to complete the merger that was announced back in April 2018.
The combined entity will own more than 163,000 towers. Airtel and Vodafone India will have equal rights in the merged entity.
“The board has further extended the long stop date till February 24, 2020, subject to agreement on closing adjustments and other conditions precedent for closing, with each party retaining the right to terminate and withdraw the scheme,” the company informed the exchanges.
Bharti Infratel also said that since the completion of merger is contingent upon receipt of requisite regulatory approvals and fulfilment of other conditions precedent, there can be no assurance that the merger can be completed within the extended time-frame.
The merger of Bharti Infratel and Indus Towers, pegged to create the world’s second largest tower company after China Tower, hangs in balance with a key government approval pertaining to enhancement in foreign direct investment not coming in time.
The merger is crucial as it will help loss-making telecom companies Bharti Airtel and Vodafone Idea sell stake to raise funds in the competitive telecom battleground, especially at a time when they have to pay huge dues to the department of telecommunications after an unfavourable court verdict in October.
Bharti Airtel has set aside ₹34,260 crore and Vodafone Idea has made provisions for ₹25,677.9 crore in the September quarter after the Supreme Court upheld the government’s definition of revenue based on which telecom companies pay levies.