The Department of Telecommunications (DoT) is learnt to have cleared Bharti Infratel's mega merger deal with Indus, sources said, paving the way for creating one of the world’s largest telecom tower companies with over 1,63,000 towers, and also offering a much needed avenue for beleaguered Vodafone Idea to raise funds to clear a portion of its massive AGR dues to the government.
The companies are believed to have received the critical foreign direct investment (FDI) nod for the merger deal from DoT on Friday evening, a person with direct knowledge told ET. The deal was stuck for several months as DoT is learnt to have held in abeyance the FDI approval due to a Rs 220 billion withholding tax dispute between UK's Vodafone Group and India.
Loss-making Vodafone Idea has been banking on this tower merger deal closure to raise roughly Rs 45 billion from the sale of its stake in the combined entity, which could be used to pay a portion of its AGR dues, estimated at nearly Rs 570 billion by the DoT.
Shares of the company declined Rs 15.3, or 2.8%, to settle at Rs 530.20. The total volume of shares traded was 190,879 at the BSE (Monday).