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Regular-article-logo Wednesday, 17 April 2024

Tata Tele, Airtel to give Rs 7,200cr surety

Telecom minister Manoj Sinha had given a conditional nod to the merger

PTI New Delhi Published 11.04.19, 08:19 PM
The merger is subject to the condition that the Sunil Bharti Mittal-led firm furnishes Rs 7,200 crore worth bank guarantee

The merger is subject to the condition that the Sunil Bharti Mittal-led firm furnishes Rs 7,200 crore worth bank guarantee Picture by Shutterstock

The department of telecom has given its approval to the merger of Tata Teleservices (TTSL) with Bharti Airtel, subject to the condition that the Sunil Bharti Mittal-led firm furnishes Rs 7,200 crore worth bank guarantee, a government official said.

On April 9, telecom minister Manoj Sinha gave a conditional nod to the merger, the official said. The National Company Law Tribunal of Mumbai and Delhi had separately approved the merger and the deal needed clearance from the DoT. The two companies had agreed on the merger in October 2017.

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Subsequent to the minister’s approval, the official said the DoT has asked Airtel to furnish bank guarantee totalling Rs 7,200 crore.

“Both companies also need to submit undertaking on matter related to court cases before merger is taken on record,” the official said.

The merger will be taken on record after Airtel submits bank guarantee of about Rs 6,000 crore for one-time spectrum charges and another Rs 1,200 crore for the spectrum that would be acquired from TTSL. There is also a “very small amount” of dues that has to be cleared by TTSL.

The Telegraph

As part of the proposed agreement, Airtel will absorb Tata consumer mobile business (CMB) operations in 19 telecom circles (17 under TTSL and 2 under Tata Teleservices (Maharashtra).

It also agreed to take over a small portion of the unpaid spectrum liability of the Tatas.

The merger will bolster Airtel’s spectrum pool with significant additional 178.5 MHz spectrum in 1800, 2100 and 850 MHz bands, all widely used for 4G.

The proposed merger will include the transfer of all the customers and assets of Tata CMB to Airtel. The merger got delayed mainly because the DoT had sought clarifications on payments relating to spectrum-use charges and one-time spectrum fees.

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