Bharti Infratel and Indus Towers have received government approval for their proposed merger, according to sources familiar with the matter.
While the approval has not yet been officially announced, sources close to the matter told the Economic Times of India that the Department of Telecoms was poised to give the merger the greenlight.
The newly merged entity would become one of the largest telecoms towers companies in the world, with a portfolio of over 163,000 towers.
The move will be good news for cash strapped telco, Vodafone Idea, who holds an 11.5 per cent stake in the combined entity, valued at around $625 million (4,500 crore rupees). It is believed that Vodafone Idea would look to divest its stake pre-merger to free up much needed cash to pay off its adjusted growth revenue (AGR) dues. It is estimated that Vodafone Idea owes as much as $7.9 billion (57,000 crore rupees) to the Department of Telecoms, $3.9 billion of which is in relation to the company’s revised AGR dues, following the landmark ruling by India’s Supreme Court last year.Indus Towers is currently a joint venture between Bharti Infratel, Vodafone Idea and Vodafone Group. According to the ET report, if Vodafone Idea does opt to divest its stake in the company, the newly merged entity would be 37.2 per cent owned by Bharti Airtel and 29.4 per cent by Vodafone Group.