Bharti Airtel is a step closer to getting approval for closing the Telenor India acquisition, after the telecom department did not raise objections to the deal in its submission to the National Company Law Tribunal.
In an affidavit submitted to the NCLT, the Department of Telecommunications, however, noted that Airtel would have to submit two bank guarantees totalling about Rs 1,700 crore to the government over spectrum payments. It also laid out details of the money owed by both companies, but most of its demands for payment have been stayed by courts.
After the NCLT’s clearance, the companies will require also a formal approval from the telecom department to close the deal.
The affidavit was in response to an NCLT notice to the department, asking it to give “a complete picture” regarding the un-utilised spectrum belonging to Telenor India.
EThas seen a copy of the affidavit. “It is respectfully submitted that the Department of Telecommunications (DoT) may have no objection to transfer/merger of licences subject to the fulfilment of the conditions laid down in the guidelines of the merger and acquisitions (issued in February 2014),” DoT said in its affidavit, dated January 18.
As per the MA guidelines, the merged entity will have to submit an undertaking that any demand raised before the merger will have to be paid, and if those demands — other than one-time spectrum charge — are stayed by the courts, the payments will be subject to the result of the litigation, the department said. “Therefore the resultant entity has to submit an unequivocal and unconditional undertaking before the transfer/merger of licences and the approval shall be granted only after the submission,” it informed the NCLT.
DoT said other demands to the two carriers were either pending in the apex court or have been stayed by some other courts or the telecom tribunal. Demands from Airtel and Telenor of Rs 8,310 crore and Rs 818 crore in licence fee and Rs 1,528 crore and Rs 54.49 crore in spectrum usage charge, respectively, can’t be enforced as they are part of adjusted gross revenue, the current definition of which has been contested in the Supreme Court.
Telenor had agreed about a year ago to sell its India business to Bharti Airtel.