Comments
The approval for the merger of Vodafone and Idea Cellular will come within this month, as both the companies have paid their dues on Monday, sources at the Department of Telecom told BusinessLine .
“We have got the dues, both in cash and bank guarantee. They are under process and approval can happen any time now and definitely before this month-end,” a senior official at DoT said.
The merger between the two companies moved a step closer with the companies settling all their dues with the DoT on Monday that included ₹3,926 crore in cash and ₹3,322 crore in bank guarantees, totalling ₹7,248 crore . Both the operators had earlier urged the DoT to recalculate the amount due. But the DoT had rejected the proposal. The DoT had given a conditional nod to the merger earlier this month, with a demand of ₹7, 248-crore upfront payment.
The amount due was split between the two companies — ₹3,322 crore from Idea Cellular, on account of one-time spectrum charges and bank guarantee, and a cash payment of ₹3,926 crore from Vodafone towards the market price for non-auctioned radio waves.
Once approved, Vodafone Idea Ltd (as the merged entity will be called) will be the largest telecom company with around 436 million customers, surpassing Bharti Airtel with 344 million customers. The merged entity will be worth over ₹1.5 lakh crore, with a 35 per cent market share in the Indian telecom sector. The merger is also expected to give a breather to both debt-ridden firms Idea and Vodafone, from the cut-throat competition in the market where margins have been hit with free voice calls.
While Vodafone will own 45.1 per cent in the new entity, Idea will have 26 per cent and its shareholders 28.9 per cent. The Aditya Birla Group will also have the right to acquire up to a 9.5 per cent additional stake from Vodafone under the agreement to equalise the shareholdings over time.
Shares of Idea Cellular gained over 7 per cent on the BSE on Tuesday on the news of the companies clearing the dues to the DoT. Shares of the company closed at ₹56.50, up 7.31 per cent from the previous close.
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.