Kolkata: Bharti Infratel’s board will meet on June 11 to take a final call on its big-ticket merger deal with Indus Towers that will pave the way for creating one of the world’s biggest telecom tower companies with 1,69,000 towers.

“The board of directors in its June 3 meeting, inter-alia, took note of the status of scheme of arrangement between Indus Towers and Bharti Infratel, (and it) has decided to meet on June 11 to take the final decision on the matter, keeping in mind the best interest of the company and its stakeholders,” Bharti Infratel said in an exchange filing Thursday.

In February, the mega towers merger deal had received foreign direct investment (FDI) nod. But two more steps are left before the deal can be closed. It needs to be cleared by National Company Law Tribunal-Chandigarh and then taken on record by the Registrar of Companies.

Both the cash-out and share swap options exist on paper in line with the original merger deal terms, but indications are that the principal stakeholders of the proposed Bharti Infratel-Indus combined entity – Bharti Group and Vodafone Plc – may go for a share swap arrangement, as reported by ET last month.

This is since analysts expect the cash payout to Vodafone Idea and Providence – stakeholders in Indus – to be sharply lower if they take the cash exit option, largely triggered by big changes in sectoral ground realities — fewer mobile operators, reduced tower sharing factor — since the Bharti-Infratel-Indus merger was announced over two years ago.

Under the merger terms, Vodafone Idea can sell its 7.1 per cent stake in the combined towers entity for an estimated Rs 4,500 crore, cash that would be handy for it to clear a portion of its remaining Rs 51,000 crore AGR dues. Providence, in turn, which has a 4.85 per cent stake in Indus, can monetise a 3.35 per cent bloc for cash, and get a 1.1 per cent stake in the combined tower entity – in exchange for its balance 1.5 per cent in Indus.

Alternately, VIL can swap its 11.15 per cent stake in Indus for a 7.1 per cent stake in the merged entity and Providence can exchange its holdings for 3.1 per cent in the merged entity.

CLSA expects “a review of the Bharti Infratel-Indus merger deal terms, which could lead to the cash payout being lower by 40 per cent (Rs 5,400 crore versus Rs 8,800 crore when announced) and would be favourable for Bharti Infratel shareholders”.

Given that the changed industry contours have also dented Bharti Infratel’s market-cap – it has plunged from Rs 60,279 crore ($8.3 billion) on April 25, 2018 – date of merger announcement – to Rs 40,599 crore ($5.37 billion) now – experts believe the tower arm of Bharti Airtel won’t be averse to paying a lower consideration. The cash consideration, payable by Bharti Infratel, is based on an agreed formula.

In April, the Bharti Infratel board had extended the long stop date of the merger till June 24, with each party retaining the right to terminate and withdraw the scheme at any point. Accordingly, “there can be no certainty whether the merger will get completed or not,” Bharti Infratel said in its exchange regulatory filing.

Bharti Infratel shares were flattish, closing 0.23 per cent higher at Rs 219.50 on BSE Thursday.

At press time, Bharti Infratel declined to respond to ET’s queries.

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