Bharti Infratel, Indus Towers merger complete; Vodafone Idea sells Indus stake for Rs 3,760 crore

The merger process of Bharti Infratel and Indus Towers to create a mega tower company has been completed, and Vodafone Idea has received Rs 3,760.1 crore cash for its 11.15 per cent holding in Indus, a regulatory filing said on Thursday.

The promoters of Vodafone Group will hold 28.12 per cent stake in the merged entity, while the holding of Airtel Group will be about 36.7 per cent.

Bharti Infratel in the regulatory filing said, "The Board has allotted 757,821,804 equity shares of Rs 10 each to the Vodafone group and 87,506,900 equity shares of Rs 10 each to PS Asia Holding Investments (Mauritius) Limited (Providence) aggregating to 28.12 per cent and 3.25 per cent respectively in the post-issue share capital of the company."

The filing said, "Vodafone Idea Limited (VIL) had elected to receive cash pursuant to the right available to certain shareholders as per clause 1.2 of Part C of the Scheme. Pursuant to the same, VIL has received cash consideration of Rs. 37,601 million for its 11.15 per cent shareholding in Indus. The said transaction had been executed and completed on November 19, 2020 ("VIL closing")."

It further said the merger of Indus and Infratel "has been completed", and added that Vodafone Idea has received cash consideration of Rs 3,760.1 crore for its 11.15 per cent shareholding in Indus. The filing said, "Subsequent to the filing of the NCLT orders by the respective companies with the Registrar of Companies today...November 19, 2020, the Scheme has become effective on even date and Induserger of Indus and Infratel has been completed."

"Merger of Indus Towers Limited & Bharti Infratel Limited has been completed today. The combined entity, to be renamed as Indus Towers Limited, is listed on the National Stock Exchange of India Limited & BSE Limited," said Bharti Airtel.

"Upon implementation of the Scheme, the aggregate shareholding of the Company (along with Nettle Infrastructure Investments Limited, a wholly-owned subsidiary) in the combined entity shall be changed from 53.51 per cent to 36.73 per cent," the company said in a regulatory filing.

Prior to the merger with Indus, Bharti Infratel held 42 per cent stake in the mobile tower firm (Indus Towers), which was a three-way joint venture with British telecom giant Vodafone and Vodafone Idea having 42 per cent and 11.15 per cent stake, respectively.

The merged entity will be renamed ''Indus Towers Limited''. Bimal Dayal has been named as the CEO of the merged entity. The board has also proposed appointment of Bimal Dayal as the Managing Director and CEO of the company to be made effective from the date of approval of the shareholders of the company," it said, adding the company will follow the due process for seeking shareholders'' nod shortly.

It added the change of name will be subject to the company complying with all the statutory filing requirements under the Companies Act, 2013 for placing the change of name in the Register of Companies. The same will be intimated to the stock exchanges upon completion of the process.

The board of directors of the company will also be re-constituted, and accordingly, Akhil Gupta, executive chairman (of Bharti Infratel) and few of the independent directors have resigned from the board.

The board, based on the recommendation of the HR, Nomination and Remuneration Committee, has approved the appointment of some additional directors, including Gopal Vittal, Harjeet Kohli, Ravinder Takkar and Balesh Sharma as non-executive non-independent directors.

The latest move to sell its 11.15 per cent stake in Indus will come as a breather to Vodafone Idea, which is facing more than Rs 58,000 crore demands in overall statutory dues after the Supreme Court last year ordered non-telecom revenues to be included in calculating statutory liabilities. VIL has made payment of about Rs 7,850 crore so far towards its statutory dues.

The apex court has directed telecom operators to pay 10 per cent of their total Adjusted Gross Revenue (AGR)-related dues this year, and the rest in 10 installments starting from next fiscal.

In a separate filing on Thursday, VIL said it "has sold its 11.15 per cent stake in Indus for a cash consideration of Rs 37.6 billion in accordance with the terms of the agreement and out of the consideration received from Infratel, the company has made a prepayment of Rs 24 billion which will be adjusted in line with terms of the agreement."