Bharti Infratel to proceed with Indus Tower merger, Vodafone to get Rs 4,000 crore for 11.15% holding

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Bharti Infratel has informed the exchanges that its Board of Directors discussed, in a meeting held on August 31, the scheme of arrangement with Indus Towers and related agreements, and has decided to proceed with the merger.

“After deliberations the Board has authorised the chairman to proceed with the scheme and comply with other procedural requirements to complete the merger – including approaching the National Companies Law Tribunal (NCLT) to make the scheme effective subject to certain procedural condition precedents,” the company’s statement read.

Based on the adjustments, the company shared likely shareholding structure (subject to change based on agreed closing adjustments) as Vodafone with 28.2 percent stake, Providence Equity Partners (PEP) with 3.2 percent stake, total share swap for Indus as 31.4 percent, and Infratel shareholders with 68.6 percent in the merged company.

“This is a basis cash consideration chosen by Vodafone Idea for its 11.15 percent shareholding in Indus which will be based on 60 days VWAP as at closing date (and agreed closing adjustments) for approximately Rs 4,000 crore,” the statement added.

The merged company will see Airtel hold 36.7 percent stake, followed by Vodafone UK with 28.2 percent stake, and Providence with 3.2 percent stake, while the balance 31.6 percent will be held by public shareholders, CNBC-TV18 reported.

Vodafone Idea has entered into certain security arrangements with Bharti Airtel to secure its payment obligations under MSAs, Vodafone Idea and Vodafone Group Plc for the benefit of the merged company, it also informed.

These arrangements include a combination of a security deposit by Vodafone Idea, security via pledge of a certain number of shares of the merged company out of those issued to V Plc. (as part of the scheme) and a Corporate Guarantee by V Plc. which can get triggered in certain situations and events.

“These security arrangements remain subject to all applicable regulatory approvals and any approval of Vodafone Plc’s lenders and will provide the merged company a payment cover of over one year for operational payments due from Vodafone Idea,” it added.

The scheme shall become effective on the date on which certified copy of the NCLT order is filed with the Registrar of Companies and will be communicated to the exchanges once through, it said.

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