Bharti Infratel, Indus Towers Merger Deadline Extended Till Aug. 31
The merger of Bharti Infratel Ltd. and the unlisted Indus Towers Ltd., which would create the biggest tower company outside of China, was deferred again, delaying India’s struggling telecom operators' plan to unlock value.
The conditions precedent to be fulfilled for the merger to become effective cannot be completed by the extended deadline, June 24. So, the board of Bharti Airtel Ltd.'s tower unit further extended the long stop date till Aug. 31, according to an exchange filing. Each party retains the right to terminate and withdraw from the scheme, it said.
The telecom infrastructure firm has extended the deadline for merger for the fifth time. The deal was signed in April 2018 with the initial deadline for merger in October 2019. That, however, was extended to December and then till February 2020. Despite receiving the final approval from the Department of Telecommunications on Feb. 21, Bharti Infratel deferred the deal till April 24 and then again until June 24.
Repeated delay in unlocking value could be another cause of worry for Bharti Airtel, Vodafone Idea Ltd. and Vodafone Group Plc as they are looking to raise funds by divesting stake in the merged entity. The operators, locked in a tariff war, have to pay thousands of crores in pending dues after the Supreme Court ruled that wireless carriers will have to include non-core revenue to calculate levies.
Indus Towers is jointly owned by Bharti Infratel (42%), Vodafone Group Plc (42%), Vodafone Idea (11.15%) and U.S.-based asset management firm Providence Equity Partners (4.85%).
Bharti Infratel and Indus Towers have overlapping operations in four circles—Haryana, Uttar Pradesh (west), Uttar Pradesh (east) and Rajasthan. The combined entity will control more than a third of the market in India with over 169,000 towers operating across all 22 telecom service areas. Its tenancy ratio, or the number of operators who put up their antennae on the towers, is nearly 1.84 times.
On Wednesday, Bharti Infratel shares rose 0.37% to Rs 233.15 apiece on the BSE even as the benchmark Sensex shed 1.58% to end the day at 34,868.98 points.