NEW DELHI: Telecom infra company Bharti Infratel on Wednesday decided to push the deadline for completion of merger with Indus Towers by over two months till August 31, according to a regulatory filing.
The move comes at a time when the Supreme Court is hearing the crucial AGR matter, whose outcome will define the contours of the telecom market, and future viability particularly of Vodafone Idea.
Since Vodafone Idea is a customer for both Bharti Infratel and Indus, the final decision in Adjusted Gross Revenue (AGR) case will have a bearing on the mega-tower deal in-the-works, its valuation, and other key nuances, market watchers said.
In a BSE filing, Bharti Infratel said that its board met on Wednesday and took note of the status of scheme of arrangement between Indus and Bharti Infratel.
"Since the conditions precedent to be fulfilled for the scheme to become effective cannot be completed by the extended Long Stop Date that is June 24, 2020, the board of directors has further extended the Long Stop Date till August 31,2020, subject to agreement on closing adjustments and other conditions precedent for closing, with each party retaining the right to terminate and withdraw the scheme," the company said in a BSE filing.
The final decision to implement the scheme will be taken by the board keeping in mind the best interest of the company and its stakeholders, Bharti Infratel added.
It is pertinent to mention here that Bharti Infratel had earlier this month rescheduled its board meeting which was slated to be held on June 11 to take final call on merger with Indus Towers.
It had cited delay in receipt of certain inputs that would have been required by the board for it to deliberate and take a final decision.
On June 4, while intimating about the board meet, the company had said there can be no certainty on whether the merger will get completed or not, as each party had retained the right to terminate and withdraw the scheme at any point.
Bharti Infratel holds 42 per cent stake in the mobile tower firm Indus Towers, which is a three-way joint venture with British telecom giant Vodafone and Vodafone Idea having 42 per cent and 11.15 per cent stake, respectively.
At the company's fourth quarter earnings call in April, Akhil Gupta, chairman of Bharti Infratel, had admitted that the impending merger has been an overhang on the company but had indicated that the matter will be decided one way or the other in the next two months.
The mega deal - announced in April 2018 - was initially slated to close before the end of 2018-19, subject to statutory approvals.
The delay in completion of the deal has been a setback especially to Vodafone Idea which is confronted with a staggering Rs 58,000 crore in statutory dues; it was expected that Vodafone Idea will get around Rs 5,500 crore from stake sale in Indus Towers.
In the last hearing on the AGR matter on June 18, the apex court said that private telecom operators including Bharti Airtel, Vodafone Idea must come out with a "reasonable payment plan", make some payment to "show their bonafide" and file their books of accounts for the last 10 years.
The court has fixed the AGR dues case for further consideration in the third week of July.
Telecom firms have to pay AGR related dues along with interest and penalty -- estimated to be around Rs 1.6 lakh crore.
Telecom companies were keen on a 20-year timeline to pay up their statutory dues, in a staggered manner.