Comments
Bharti Infratel and Indus Towers are likely to invest ₹ 3,500 crore in operations as capital expenditure for 2018-19 as they continue to operate on ‘business-as-usual’ mode till their merger happens before the fiscal-end, sources said.
The two companies, last month, announced a merger deal that will create a $ 14.6 billion firm. The merged entity will have, in its fold, more than 1,63,000 towers across India - largest after China Tower.
The transaction is subject to regulatory and other approvals which the two companies will now pursue, starting with Competition Commission of India (CCI) and thereafter SEBI, NCLT and Department of Telecom (FDI approval). The companies have said the deal is expected to close before the end of 2018-19.
A source privy to the development said the annual financial planning continues on course for both the companies as it is ‘business-as-usual’, and that Infratel’s capex is expected to be in the ballpark range of ₹ 1,200 crore in 2018-19.
Similarly, Indus Towers - where Infratel holds 42 per cent stake - is likely to infuse roughly ₹ 2,300-2,500 crore as capex this year, said the official who did not wish to be named.
Indus Towers is jointly owned by Bharti Infratel (42 per cent holding), Vodafone (42 per cent), Idea Group (11.15 per cent) and Providence (4.85 per cent).
The amount of investment is similar to last year’s levels and will go into “new towers, tenancies and replacement capital”, the official said adding that the investments are being funded from internal accruals of the two tower firms.
A Bharti spokesperson declined to comment on a detailed e-mailed query sent to the company. Indus Towers did not wish to comment.
“The capex amount will also be used for replacement of batteries, DG (diesel generators), power equipment...As the tenancies increase, the two companies will continue to increase their capacities of mobile towers ahead of their proposed merger,” said the source.
Last month, the two entities announced that, “Indus Towers will be merged with and into Bharti Infratel through a scheme of arrangement.” The merged entity, which will be called Indus Towers, will remain listed.
Bharti Airtel, which owns 53.5 per cent in Bharti Infratel, will get 33.8-37.2 per cent stake in the combined entity. Its final shareholding depends on what Aditya Birla Group’s Idea and Providence do with their minority shareholding in Indus Towers.
Vodafone India will get between 26.7 per cent and 29.4 per cent of the Indus-Bharti Infratel combine.
.
Comments
COMMENT NOW
Comments
Comments have to be in English, and in full sentences. They cannot be abusive or personal. Please abide by our community guidelines for posting your comments.
We have migrated to a new commenting platform. If you are already a registered user of TheHindu Businessline and logged in, you may continue to engage with our articles. If you do not have an account please register and login to post comments. Users can access their older comments by logging into their accounts on Vuukle.