Bharti Airtel and Tata Teleservices Merger Deal Receives Clearance from NCLT Mumbai Bench

In its bid to strengthen 4G network capacity and to bridge the gap in subscriber base between the telecom leader, Vodafone Idea, Bharti Airtel made the move to acquire the Tata Teleservices’ consumer mobility business last year. However, the acquisition was pending clearance from the National Company Law Tribunal (NCLT). In the latest revelation made by ET Telecom, the Mumbai bench of the NCLT has finally approved the Sunil Bharti Mittal led telco to acquire the consumer mobility wing of Tata Teleservices. The deal will also help the former market leader in strengthening its 4G spectrum portfolio thus increasing its odds against the Mukesh Ambani led telecom operator, Reliance Jio.

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Bharti Airtel to Now Seek Approval from DoT After NCLT

In a regulatory filing on BSE Wednesday, Tata Teleservices said, NCLT’s Mumbai bench “has sanctioned the scheme of arrangement amongst Tata Teleservices (Maharashtra) and Bharti Airtel and their respective shareholders and creditors under Sections 230 to 232 and other applicable provisions of the Companies Act, 2013.”

The company remarked that the scheme would “be given effect, subject to the fulfilment of certain conditions, including transferee company (read: Bharti Airtel) obtaining necessary approval of NCLT’s Delhi bench and the approval of the DoT”.

When ET sent out questions to Bharti Airtel, they went unanswered. However, the clearance from the NCLT is one of the many which Bharti Airtel has to acquire before it goes ahead with the merger proceedings. More importantly, now the telecom operator will need to take clearance from the Delhi bench of NCLT and then from the Department of Telecommunications (DoT). As per the agreement between the two companies, Bharti Airtel will take responsibility for approximately Rs 1,500 – Rs 2,000 crore worth of spectrum auction related dues out of the total Rs 10,000 crore that Tata Teleservices needs to make to the government in the coming years.