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    Vodafone Idea can exit only after NCLT okays, Registrar of Companies records deal

    Synopsis

    “The FDI nod to the Bharti Infratel-Indus merger is a huge positive for VIL to raise funds, but it will be next to impossible for the telco to monetise its Indus stake by March 17 as key approvals are still pending. These approvals would take at least a couple of months,” a senior industry executive familiar with the merger process told ET on condition of anonymity.

    Agencies
    Under merger terms, VIL has the option to sell its entire 7% which it will get in the merged entity to the shareholders for cash, based on an agreed formula.
    KOLKATA: Vodafone Idea (VIL) will not be able to cash out of the Bharti Infratel-Indus Towers merged entity early enough to generate money to help pay off a bigger part of its huge adjusted gross revenue (AGR) dues by March 17, the deadline set by the Supreme Court. This was stated by industry executives and analysts.

    There are two more steps left before the deal can be closed and these would take another two-three months, they said. The merger will have to be first cleared by the National Company Law Tribunal-Chandigarh and then taken on record by the Registrar of Companies.

    “The FDI nod to the Bharti Infratel-Indus merger is a huge positive for VIL to raise funds, but it will be next to impossible for the telco to monetise its Indus stake by March 17 as key approvals are still pending. These approvals would take at least a couple of months,” a senior industry executive familiar with the merger process told ET on condition of anonymity.

    At best, VIL, he said, “can start the stake-sale talks with potential buyers with the FDI approval coming in”.

    Under merger terms, VIL has the option to sell its entire 7 per cent which it will get in the merged entity to the shareholders for cash, based on an agreed formula. Under current circumstances, selling to existing shareholders under a pre-agreed formula may be the best or quickest option, as per industry executives.

    2


    ET’s queries to VIL and Bharti Infratel remained unanswered till press time on Sunday.

    Bharti Infratel’s board will meet on Monday to decide future course of action on the merger.
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    3 Comments on this Story

    Ravi Bhangaonkar331 days ago
    Doing business is good. But not following norms of the nation about taxes is... Now one can say anything in this liberty of speeh era...
    Samuel Diaw332 days ago
    DoT and IT Tax Tribunal Dept are driving vodafone idea to eject out of India and thereby, crash Indian economy totally then....
    Prasad Salvi332 days ago
    Exit? What a stupid heading
    Read before you invest. Insights on Vodafone Idea Ltd.. Explore Now
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