Mobile operator Idea Cellulartoday said it has sought approval of the National Company LawTribunal (NCLT) for the merger of its operations with Vodafone India.
Idea's move comes after the Securities and Exchange Boardof India (Sebi) and exchanges gave their conditional nod tothe proposed USD 23-billion merger deal that would createthe country's largest telecom operator."Idea Cellular yesterday filed an application before the National Company Law Tribunal, Ahmedabad bench, for approval of the merger of Vodafone India Ltd and Vodafone Mobile Services Ltd with the company," Idea said in a statement.
The NCLT application follows "the receipt of approvals from the Competition Commission of India on July 24, 2017, and the stock exchanges/Sebi on August 4, 2017", it added.
The combined entity is expected to create a mobile services juggernaut with nearly 400 million users and a 35 percent market share in terms of customers, potentially toppling Bharti Airtel from its current pole position. The deal gives Vodafone India an implied enterprise value of Rs 82,800 crore and Idea Rs 72,200 crore.
Post the transaction, the British firm will own 45.1 percent stake in the merged entity while the Aditya Birla group, Idea's parent, will have 26 per cent after paying Rs 3,874crore cash for a 4.9 per cent stake. The remaining 28.9 per cent will be held by other shareholders. Sebi and the bourses have recently given the conditional nod to the deal.
In their 'no-objection' letters on the scheme of amalgamation, the two bourses -- the BSE and the NSE --emphasized that all the conditions put forth by the regulator need to be placed before the NCLT while seeking its go-ahead. Sebi noted that a complaint was received alleging that one of the promoters of Idea Cellular had purchased 0.23 percent shares of the company prior to the announcement of the draft amalgamation scheme, in violation of securities laws, and added that the charges are being examined by it.
The buyers have given a voluntary undertaking not to dispose of the said shares till Sebi gives further directions and any liability eventually held to be valid against the purchasers shall be borne by them.
Further, the explanatory statement to the notice to shareholders needs to disclose prominently that Sebi is looking into the charges with regard to said transaction done by the purchasers prior to the announcement of the scheme. The regulator has asked Idea to include the observations of Sebi and exchanges in the petition to be filed before NCLTand the company is obliged to bring the same to the tribunal's notice.