The board of Bharti Infratel will meet on Tuesday to take stock of the progress made to complete the merger with Indus Towers, announced in April 2018.
The merger, which is expected to help loss-making telecom companies Bharti Airtel and Vodafone Idea sell stake to raise funds in the competitive telecom battleground, still awaits government approval.
Bharti Infratel will discuss this in the board meeting on December 24 post which a decision will be taken.
“If the Board feels more time is needed (to secure government approval) then it (long stop date) may be extended further or else various other options can be looked at,” a person familiar with the matter told Mint.
To be sure, in October the board had already given a two-month extension to secure the government’s approval.
A special committee by Bharti Infratel, set up in October, had extended the long stop date to 24 December.
As the merger is contingent upon receipt of regulatory approvals and fulfilment of other conditions, there can be no assurance that the process can be completed within the extended time-frame, Bharti Infratel had informed the BSE on 24 October.
This merger will help Bharti Airtel and Vodafone Group Plc, promoters of Indus Towers, to sell their stake, bring down debt and invest in wireless operations in India, which have been facing the heat of a tariff war started with the entry of Reliance Jio in September 2016.
Interestingly, rival Jio has already inked a binding agreement to raise funds by monetising tower assets.
Earlier this month, Reliance Industries Ltd’s wholly owned subsidiary, Reliance Industrial Investments and Holdings Ltd, entered into binding agreements with Brookfield Infrastructure Partners LP and its institutional partners for an investment of ₹25,215 crore in the units to be issued by Tower Infrastructure Trust, its tower arm.
Jio will be the anchor tenant of the tower portfolio under a 30-year master services agreement.
RIL is also simultaneously engaged with potential investors to divest stake in its fibre assets.
The tower stake deal will give more firepower to Jio in the telecom battlefield at a time when its rivals await government clearance for the merger of Indus Towers and Bharti Infratel.
Raising funds by divesting non-core assets has become crucial for telecom companies which battle cheap tariffs but still need to invest funds in growing their networks and expanding services.
Source: Mint