Bharti Airtel withdraws plans to change corporate structure scheme

Bharti Airtel on Tuesday withdrew its plans to change its corporate structure to house all its digital assets under itself, stating that it was well-positioned to invest aggressively into growth opportunities in the Indian market.

The company withdrew the plan following the seminal telecom sector reforms package that was announced by the Union Government in September 2021. The company in a statement said, the reform package has significantly boosted the outlook and investor confidence for the industry while simplifying the license framework.

The second-largest telecom service provider in India has said, "The Board of Directors ("Board") of Airtel is of the view that the existing corporate structure of the Company is, therefore, optimal for leveraging these emerging opportunities and unlocking value while continuing to scale up Airtel's digital businesses. Therefore, the scheme of arrangement for the new corporate structure announced on April 14, 2021, stands withdrawn."

With a strong balance sheet and a 5G ready network, Bharti Airtel is well-positioned to invest aggressively in the emerging growth opportunities offered by India's digital economy.

Airtel added that under the modified scheme, the Company, as previously approved by the Board, will merge its wholly-owned subsidiary Telesonic Networks Limited, resulting in consolidation of its fiber assets into Airtel. In addition, Nettle Infrastructure Investments Limited will also be merged with Airtel.

As announced earlier, the Company will pursue its plan to eventually fold the DTH business (Bharti Telemedia) into Airtel to move towards the NDCP vision of converged services to customers.

The amalgamations under the revised Scheme shall result in:

a) Consolidation of the entire operations of the Nettle and Telesonic into the Company.

b) Simplification of the group structure by aligning the interest of various stakeholders into the Company.

c) cost reduction, retaining talent, optimization of support functions, efficiencies and productivity gains by pooling the resources of the Company and Nettle and Telesonic.

d) significant contribution to future growth and maximizing shareholders value.

Further, the amalgamation of Telesonic into the Company would consolidate all fibre assets and leased) of Telesonic in a single entity and position the company as well to effectively leverage such core infrastructure required across multiple businesses or legal entities thereby delivering greater shareholder value.

Airtel's businesses continue to be categorised under four key verticals - India, Digital, International and Infrastructure.

Nettle and Telesonic are the wholly-owned subsidiaries of the Company and therefore, provisions w.r.t. the related party transactions are not applicable for amalgamation of Nettle and Telesonic with the Company.

Nettle is engaged in promoting, establishing and funding companies engaged in the business of providing telecom services and other companies engaged in the activities ancillary to the telecom industry. As of March 31, 2021, Nettle Infrastructure Investments Limited revenue stood at Rs 11,336 million.

Telesonics is engaged in designing, planning, deploying, optimizing and managing broadband and fixed telephone networks across India. It also holds a registration certificate for infrastructure provider category-I (IP-I) and is engaged in the business relating to optical fiber cable (including underground and overground cables). As of March 31, 2021, its revenue stood at Rs 21,030 million.