Vodafone Idea Set to Receive Rs 4000 Crores, Indus Towers and Bharti Infratel Merger Near Completion

Vodafone Group on Monday said that it has agreed with Bharti Airtel and Vodafone India to continue with the completion of the merger between Indus Towers and Bharti Infratel. The British telecom giant said that it expects to be issued 760 million new shares post the completion of the merger translating to 28.2% stake in the combined company. It has been said that the new shares will be issued to Vodafone group in exchange for its 42% shareholding in Indus Towers. Further, it was said that Providence Equity Partners has also elected to receive shares in the combined company. Providence currently holds 4.85% stake in Indus Towers.

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Airtel and Vodafone Group to Jointly Control Combined Company

Crucially, the new shares expected to be issued to Vodafone Group is also said to be on the basis that Vodafone Idea has opted to sell its complete 11.15% shareholding in Indus Towers for cash. As per the current valuation as highlighted by Vodafone Group on Monday, Vodafone Idea is set to receive around Rs 4000 crores in cash post the completion upon the merger between Indus Towers and Bharti Infratel.

Vodafone Group stake in the combined company based on the current valuation of Bharti Infratel would carry a value of around Rs 15,100 crores. Further, Airtel’s shareholding in Bharti Infratel post the completion of the merger would be diluted from 53.5% to 36.7%.

Vodafone Group in the release also highlighted that it will control the combined company with Airtel.

Vodafone Idea to Pay Rs 2400 Crores Under Security Package

However, the group in its release said that the parties have all agreed for a “security package.” It was said that the package would be invoked in the case of Vodafone Idea failing to satisfy specific “payment obligations” under its Master Services Agreement (MSA) with the merged company.