Idea, Vodafone likely to start operating as single entity by April

作者:Qearl 發表日期:2018-01-16 21:53:03

Vodafone Group Private Limited and Idea Cellular Limited are likely to start operating as a merged entity from the first week of April onward, according to a Mint report.

The development was confirmed by two sources close to the matter. This will be around three months before the earlier deadline of first half of calendar year 2018.

After the merger, the merged entity will be the largest telecom company in India and the second largest in the world with over 400 million customers, with a 35 customer share and a 41 percent revenue share.  It will have a revenue of Rs 81,600 crore and an operating profit of Rs 24,400 crore.

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The only thing remaining for the two companies in the merger process is an approval from the Department of Telecommunications』 (DoT), as they have the required clearances from the Competition Commission of India (CCI), the Securities and Exchange Board of India (SEBI), and the National Company Law Tribunal (NCLT).

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「We expect DoT approval to come in the next 45-60 days,」 a person close to the development was quoted as saying.

The merger agreement will see equal rights and equal shareholding between the promoters of Idea Cellular and Vodafone Group.

According to a statement made by Vodafone on 4 January, Aditya Birla Group and Vodafone agreed that the former will buy a minimum of 2.5 percent of the merged entity from Vodafone or an equivalent amount and  will ultimately own at least 26 percent of the merged entity.

In order to ensure this, Vodafone has not allowed to its 42 percent stake in Indus Towers, which is valued at approximately USD 5 billion, to come under the ambit of the merger. The group may also decide to invest an additional Rs 2,500 as debt in the merged entity instead of pumping equity capital.

The promoters of Idea Cellular Limited earlier this month said that they will invest Rs 3,250 crore in the merged entity and that the company would aim to raise a similar amount from the market to beef up its balance sheet.