Vodafone-Idea merger gets govt’s conditional approval
Idea Will Have To Give A Bank Guarantee Of ₹3,300 Crore
Pankaj.Doval@timesgroup.com
New Delhi:10.07.2018
Ending months of uncertainty, the government on Monday gave a conditional approval to the merger between Idea Cellular and Vodafone, a move that will make it the country’s largest telecom company, ahead of Bharti Airtel. The nod for the deal, which has been in the works for over a year, came a day before Vodafone global CEO Vittorio Colao and his successor Nick Read are scheduled to meet Prime Minister Narendra Modi.
The conditions that need to be met by the two companies include Idea — which will exist after the transaction — giving a bank guarantee of Rs 3,300 crore to the government. Vodafone, which is getting merged, will have to give an undertaking that it will settle all the dues that may appear after merger.
“We have issued a letter on Monday (on conditional approval),” a source told TOI. “As soon as the companies meet the conditions, a final approval will be issued. We expect this to happen soon.”
The deal was announced in January last year and has been going through a series of approvals at various forums. It has already been approved by the Competition Commission of India, Sebi and the stock exchanges, and National Company Law Tribunal (NCLT). With the telecom department’s approval after the conditions are met, the NCLT will give a final go-ahead to the deal.
The source said that Idea also needs to “replace bank guarantees given to the telecom department by Vodafone” as part of the approval process. “This is also one of the conditions that we have listed, and is part of the M&A process. Any other running dues will also need to be paid,” the source added.
Colao and Read are visiting the country at a time when there is growing suspense over the deal due to the delays. The companies had originally said the deal will go through by the end of June this year, but were still awaiting final clearances.
Sources said Vodafone’s top bosses will also meet telecom minister Manoj Sinha and telecom secretary Aruna Sundararajan. Company officials said “not much should be read into the meetings, as they are courtesy calls before Read takes charge from Colao”.
Idea and Vodafone decided to merge their businesses in view of mounting losses and steep competition after the launch of operations by Reliance Jio in September 2016.
Idea Will Have To Give A Bank Guarantee Of ₹3,300 Crore
Pankaj.Doval@timesgroup.com
New Delhi:10.07.2018
Ending months of uncertainty, the government on Monday gave a conditional approval to the merger between Idea Cellular and Vodafone, a move that will make it the country’s largest telecom company, ahead of Bharti Airtel. The nod for the deal, which has been in the works for over a year, came a day before Vodafone global CEO Vittorio Colao and his successor Nick Read are scheduled to meet Prime Minister Narendra Modi.
The conditions that need to be met by the two companies include Idea — which will exist after the transaction — giving a bank guarantee of Rs 3,300 crore to the government. Vodafone, which is getting merged, will have to give an undertaking that it will settle all the dues that may appear after merger.
“We have issued a letter on Monday (on conditional approval),” a source told TOI. “As soon as the companies meet the conditions, a final approval will be issued. We expect this to happen soon.”
The deal was announced in January last year and has been going through a series of approvals at various forums. It has already been approved by the Competition Commission of India, Sebi and the stock exchanges, and National Company Law Tribunal (NCLT). With the telecom department’s approval after the conditions are met, the NCLT will give a final go-ahead to the deal.
The source said that Idea also needs to “replace bank guarantees given to the telecom department by Vodafone” as part of the approval process. “This is also one of the conditions that we have listed, and is part of the M&A process. Any other running dues will also need to be paid,” the source added.
Colao and Read are visiting the country at a time when there is growing suspense over the deal due to the delays. The companies had originally said the deal will go through by the end of June this year, but were still awaiting final clearances.
Sources said Vodafone’s top bosses will also meet telecom minister Manoj Sinha and telecom secretary Aruna Sundararajan. Company officials said “not much should be read into the meetings, as they are courtesy calls before Read takes charge from Colao”.
Idea and Vodafone decided to merge their businesses in view of mounting losses and steep competition after the launch of operations by Reliance Jio in September 2016.
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