Vodafone Idea (Vi) has received Rs 3,760.1 crore in cash by selling its 11.15 per cent stake in Indus Towers to the entity created after the completion of the merger of the tower company with Bharti Infratel.
The merged entity – named Indus Towers Ltd. – will be one of the world’s biggest telecom tower companies with 1,69,000 towers and will be headed by Bimal Dayal as the MD and CEO. It will have a new board comprising the likes of Bharti Airtel CEO Gopal Vittal and Vodafone Idea MD Ravinder Takkar as non-independent Directors. Bharti Infratel Chairman Akhil Gupta, along with six others, resigned from the board.
“Vi had elected to receive cash pursuant to the right available to certain shareholders as per clause 1.2 of Part C of the (merger) scheme…it has received cash consideration of Rs 3,7,60.1 crore for its 11.15 per cent shareholding in Indus,” Bharti Infratel said in a late evening exchange filing after market hours Thursday.
Vi, in a separate statement, said that “out of the consideration received from Infratel, it “has made a prepayment of Rs 2,400 crore” that would be adjusted in line with terms of the agreement. Earlier, Vi had said the prepayment sum would be adjusted to the extent of 50 per cent of all undisputed and due amounts payable by the telco to the merged towers entity, post-closing and Vi would be required to pay only the balance 50 per cent of undisputed dues.
“Further, the (Infratel) 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 P5 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 company said. The paid-up equity capital of the company also expanded to Rs. 26,949,369,500, split into 2,694,936,950 equity shares of Rs I0 each, fully paid-up.
Promoters of the merged entity, Bharti Airtel and Vodafone Group’s shareholding will be 36.7 per cent and 28.12 per cent, respectively. Providence will hold 3.25 per cent, while private equity fund, KKR and Canada Pension Plan Investment Board (CPPIB) will collectively hold 7.1 per cent. Public holding in the merged tower company will be 35.2 per cent.
Shares of Bharti Infratel closed 2.32 per cent lower at Rs 185.60, while Vi’s ended marginally higher (0.8 per cent) at Rs 9.27 on BSE Thursday. Bharti Airtel shares also closed 2.07 per cent lower at Rs 468.60.
The mega towers merger was first announced in April 2018. Back then, Vi was estimated to net almost Rs 6,500 crore for its Indus stake. But the delay in closing of the deal – mainly due to the long time taken to get foreign direct investment (FDI) clearance, which finally came in February, and the uncertainty around Vodafone Idea’s future owing to the adjusted gross revenue (AGR) crisis – has meant a lower take home for the Indo-UK telecom JV with the valuations of the tower companies depleting in the interim period.
Having received National Companies Law Tribunal nod for the merger, Bharti Infratel announced the closing of the deal after completing the Registrar of Companies (RoC) filing process on Thursday. Bharti Infratel will, accordingly, cease to be Bharti Airtel’s tower arm and will be renamed Indus Towers. The statement added that “the transaction was executed and completed” on November 19.
Loss-making Vi desperately needs cash to invest top dollars to expand its 4G network to catch up with Bharti Airtel and Reliance Jio and clear Rs 50,400 crore of balance adjusted gross revenue (AGR) dues payable over 10 annual instalments through March 31, 2031. Last month, Vi’s MD Takkar had said the telco’s plans to raise as much as Rs 25,000 crore are getting a positive response and are set to conclude in two-to-three months.
Source: Economic Times