Airtel’s Board Gives Green Signal on Takeover of Tata Teleservices Telecom Business

Telecom operator Bharti Airtel’s board today approved the agreement to take over the telecom arm of Tata Teleservices. Back in October 2017, Airtel announced that it’s taking over Tata’s telecom business on a ‘no-debt, no-cash basis,’ since the latter is not able to sustain the current telecom scenario. Both the companies announced the deal.

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“The Board of Director in its meeting held on December 19, 2017, has approved…composite scheme of arrangement between Tata Teleservices, Bharti Airtel and Bharti Hexacom and their respective shareholders and creditors…,” Airtel said in a regulatory filing as reported by Press Trust of India (PTI).

Under the agreement, more than 40 million subscribers of Tata Teleservices (TTSL) and Tata Teleservices Maharashtra Limited (TTML) will be moved to Bharti Airtel’s network. TTSL and TTML have operations in 19 circles combined.

“The Board also approved another scheme of arrangement between the listed entity Tata Teleservices Maharashtra (TTML) and Airtel and their respective shareholders and creditors,” added the report.

Airtel also stated that the deal would involve demerger of consumer wireless business of Tata Teleservices (TTSL) to Airtel, minus the Rajasthan circle, which will be demerged to Airtel’ subsidiary Bharti Hexacom.

Tata Teleservices reported a turnover of Rs 7,366 crore during 2016-17, which is about 12% of the turnover reported by Airtel of Rs 62,276 crore.

Airtel will be issuing 500 unlisted Redeemable Preference Shares (RPS) of the face value of Rs 100 each to all equity shareholders of TTSL equitable to their holding. The issuing also includes allotment of 10 unlisted RPS of Rs 100 face value each to all the TTSL Compulsory Convertible Preference Shares (CCPS) holders.