Unit of Singtel associate Bharti Airtel gets board approval for Indus Towers merger

THE board of Bharti Infratel has authorised the company's chairman to proceed with the scheme of arrangement between Indus Towers and Bharti Infratel and to comply with other procedural requirements for completing the merger.

This includes approaching the National Company Law Tribunal to make the scheme effective, subject to certain procedural conditions precedent, Bharti Infratel said in a press statement on Tuesday.

Bharti Infratel is a subsidiary of Bharti Airtel, the Indian associate telco of mainboard-listed Singtel.

The company's board of directors had on multiple occasions extended the long-stop date for the scheme to become effective as other actions and conditions required could not be completed. The last extension was on June 24 to the latest long-stop date of Aug 31.

The company also disclosed the likely shareholding structure in the merged entity, based on adjustments reflecting current facts and circumstances. These percentages are subject to change based on agreed closing adjustments, Bharti Infratel said.

Current Infratel shareholders will hold the bulk of the shareholding at 68.6 per cent, total for Indus share swap at 31.4 per cent, Vodafone Group at 28.2 per cent, and PEP at 3.2 per cent.

Bharti Infratel said the likely shareholding structure is based on the cash consideration chosen by Vodafone Idea for the sale of the latter's 11.15 per cent shareholding in Indus, which will be based on 60 days of volume-weighted average price as at the closing date. Based on Tuesday's calculation, the cash consideration comes to about 4,000 crore rupees (S$740.7 million).

To secure the payment obligation of Vodafone Idea under the master service agreements, Vodafone Idea and Vodafone Group have entered into certain security arrangements with Bharti Infratel for the benefit of the merged entity.

"While the parties have agreed to proceed to take appropriate steps to progress the approvals for the merger, the completion of the transaction shall be subject to receipt of all such approvals," the company said.

The proposed merger of Indus Towers and Bharti Infratel will create one of the largest telecom tower companies in the world, with more than 163,000 structures.

Singtel shares were trading down S$0.01 or 0.4 per cent at S$2.29 as at 11.49am on Tuesday, after the announcement.