Indus Towers, Bharti Infratel merger in advanced stage; Bimal Dayal named CEO of new entity

Industry:    May, 2019

Bimal Dayal, chief executive officer of Indus Towers, will head the new tower company to be formed by the merger of Indus Towers and Bharti InfratelNSE 0.11 %, while Hemant Ruia will be the chief financial officer.

Dayal is proposed to be appointed as the CEO of the merged entity and “will be responsible for the combined business and will take forward integration of the two companies in preparation of the merger,” Bharti Airtel and Vodafone Plc, the joint owners of the proposed merged entity, said in a statement on Tuesday. “Ruia (currently CFO of Indus Towers) is proposed to be appointed as the Chief Financial Officer of the merged entity.”

The merger, in the making for about a year, will create one of the largest tower companies globally and is expected to conclude by June end, after obtaining regulatory approvals.

“Shareholder groups (Bharti and Vodafone Group) of the combined entity resulting from the merger of Indus Towers Ltd. with Bharti Infratel Ltd. today announced that the merger process is at an advanced stage of completion,” the parent companies said.

The existing leadership teams of Indus Towers and Bharti Infratel will continue to manage their respective businesses till the merger becomes effective.

The alliance will create a pan-India company with over 163,000 towers, operating in all 22 telecom service areas with an estimated valuation of $12-13 billion.

Bharti Infratel shares rose 2.4% to Rs 276 on the BSE on Tuesday, giving the company a market capitalisation of Rs 51,049 crore ($7.3 billion).

Bharti Airtel and Vodafone Group, which own 42% each in Indus Towers, are expected to hold 37.2% and 29.4%, respectively, in the merged entity.

KKR and Canada Pension Plan Investment Board will own a combined 6%, stemming from their stake of over 10% in Bharti Infratel. Vodafone Idea, currently holding over 11% in Indus, is expected to exit at the time of merger.

ET had reported that Bharti Airtel and Vodafone Group are in talks with a consortium led by private equity firm KKR to slash their stakes by over half to 13% or less each in the new company.

While Airtel is expected to use the funds to pare debt and free up cash to fight Reliance Jio Infocomm, Vodafone may infuse the funds into Vodafone Idea, its Indian venture.

ET had reported that US-based asset management firm Providence Equity Partners is likely to join Vodafone Idea in selling stakes in Indus Towers for about Rs 2,000 crore and Rs 5,500 crore, respectively.

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