Idea-Vodafone merger receives nod from Company Law Tribunal

NCLT approves Idea Vodafone merger proposal shares erase losses

Idea shares erased losses and rose as much as 2.9% on BSE Sensex. Image Source Idea ad Youtube

Idea Cellular on Friday said that National Company Law Tribunal (NCLT) has approved the merger of Idea Cellular and Vodafone India.

"We wish to inform you that the Hon'ble National Company Law Tribunal, Bench at Ahmedabad, vide its order dated 11th January, 2018, has sanctioned the Composite Scheme of Amalgamation and Arrangement among Vodafone Mobile Services Limited and Vodafone India Limited and Idea Cellular Limited and their respective shareholders and creditors under Sections 230 and 232 and other applicable provisions of the Companies Act 2013", Idea Cellular said in a BSE filing. Vodafone is awaiting its approval from the NCLT -Mumbai bench. The higher spectrum availability and larger scale radio access along with re-deployment of overlapping equipment from rationalised sides will also lead to lower capital expenditure.

The court documents confirmed that Vodafone India will hold a minimum of 45.1% of the combined company, with Idea Cellular holding a minimum of 26%.

Vodafone India is expected to hold around 47.5 percent share in the new entity, while the rest will be owned by Idea Cellular and promoter Aditya Birla Group (AB Group).

The merger deal is expected to be completed by the middle of 2018.

Securities and Exchange Board of India (SEBI) gave its conditional approval to the merger a year ago, subject to approval from shareholders and NCLT, which have now been received.

According to figures from the Telecommunications Regulatory Authority of India (Trai), Vodafone had 17.68% of the market at the end of October 2017 and Idea had 16.20% - giving the combination a 33.88% share.

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