Bharti Infratel-Indus Towers Merger Deferred Till Feb. 24

Bharti Infratel Ltd.’s merger with unlisted Indus Towers Ltd. to create the largest tower company outside China was deferred as it still hasn’t received the government’s approval, delaying India’s struggling operators’ plan to unlock value.

Bharti Airtel Ltd.’s tower unit was unable to complete the merger, announced in April last year, within the extended timeline, according to an exchange filing. The company is still awaiting the Department of Telecommunications’ nod for enhancement of foreign direct investment limit. Hence, the board has extended the long stop date till Feb. 24, 2020, the filing said.

“There can be no assurance that the merger can be completed within the extended time frame,” Bharti Infratel said in its filing. Each party retains the right to terminate and withdraw the scheme.

The telecom infrastructure firm had extended the deadline for merger by two months to Dec. 24 due to regulatory uncertainty. Repeated delay in unlocking value could be another cause of worry for Bharti Airtel, Vodafone Idea Ltd. and Vodafone 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 more than Rs 50,000 crore in pending dues after the Supreme Court ruled that wireless carriers will have to include non-core revenue to calculate levies.

Bharti Airtel’s tower unit Bharti Infratel and Vodafone Plc own 42 percent each in Indus Towers. Vodafone Idea holds 11.15 percent and private equity firm Providence owns the rest.

The combined entity will control more than a third of the market in India with 163,000 towers and a turnover of Rs 25,000 crore. Its tenancy ratio—the number of tenants or operators who have put up their antennae on the towers—will be close to 1.86 times.