Vodafone-Idea merger: DoT clears merger with conditions

Vodafone-Idea merger: DoT clears merger with conditions

The telecom ministry (DoT) on Monday approved the merger of Vodafone India and Idea Cellular that will create the country's largest mobile services operator, an official source told PTI.

"DoT has cleared the Vodafone-Idea merger today. They will have to meet conditions for final approval, the source told PTI.

Quoting the source, the report further said that the department has asked Idea Cellular to pay Rs 3,926 crore in cash for Vodafone spectrum and furnish a bank guarantee of Rs 3,342 crore.

Earlier, telecom minister Manoj Sinha said that the government will only clear the long pending Idea-Vodafone merger immediately after the Department of Telecom (DoT) will complete all statutory formalities.

"DoT has set rules for merger and acquisition. Idea Vodafone merger will be cleared without a single second delay once DoT completes all statutory formalities," Sinha said.

Telecom Secretary Aruna Sundararajan earlier had said that the clearances related to the mega merger of Vodafone and Idea Cellular are being expedited and that it "should get done" in the timeframe of June outlined by the two companies.

The mega-merger deal of Idea Cellular and Vodafone India was expected to be finished on June 30.

Vodafone will own 45.1 per cent in the combined entity, while Aditya Birla Group would have 26 per cent and Idea shareholders 28.9 per cent.

The merged entity would be known as 'Vodafone Idea Ltd'.

Meanwhile, concerned over bad loans, particularly from the telecom sector, which is facing huge losses, the largest public sector bank, the State Bank of India (SBI) has raised doubts over the proposed merger of Vodafone India Ltd (VIL) and Idea Cellular Ltd (ICL) during the discussion on ICL's proposal to renew the limit of working capital. Bank documents related to the proposal, accessed by DNA revealed the "substantial losses of ICL (9M 2018)" and "which has raised concerns of Vodafone which may pull out of the proposed merger".