A planned multi-billion-dollar merger between telecom tower companies Bharti Infratel Ltd and Indus Towers Ltd has been delayed yet again.
Bharti Infratel, the tower arm of mobile phone operator Bharti Airtel Ltd, said in a stock-exchange filing on Monday that the deadline to complete the transaction has been extended from February 24 to April 24.
The company said it received government approval for foreign direct investment on February 21 but other conditions and actions haven’t been completed.
It also said that its board will take a final call on the deal keeping in mind the best interest of the company and its shareholders “including the assessment of the current crisis facing the telecom industry and the extent of its impact” on the company’s major customers. Both companies retain the right to terminate the deal, it added.
This is not the first time that the deal, which was first announced in April 2018, has been delayed. As part of the deal, telecom majors Bharti Airtel, Idea Cellular Ltd and Vodafone Group Plc, along with private equity firm Providence Equity Partners, had agreed to merge their respective shareholdings in Indus Towers into Bharti Infratel.
The deal, which would create the second-biggest telecom tower company in the world behind only the state-owned China Tower, was initially expected to close by the end of March 2019. But it was delayed last year, and the companies had set themselves a new deadline of October 24, 2019. However, that didn’t happen either.
Meanwhile, Idea and Vodafone have merged into Vodafone Idea Ltd, which is facing imminent closure if the government goes ahead with its demand that telecom companies pay up adjusted gross revenue dues, along with accrued interest. Vodafone Idea owes the government more than Rs 50,000 crore while Bharti Airtel’s dues total up to around Rs 35,000 crore.
Bharti Airtel owns a 53.51% stake in Bharti Infratel. The tower firm is backed by private equity firm KKR & Co. and Canada Pension Plan Investment Board. KKR and CPPIB had picked up a stake in Bharti Infratel in March 2017.
In 2018, when the deal was announced, Indus Towers’ enterprise value was pegged at Rs 71,500 crore ($10.8 billion then). The merged entity’s equity value worked out to be Rs 96,500 crore ($14.6 billion then).