NCLT approves Idea-Vodafone merger proposal; shares erase losses

National Company Law Tribunal’s Ahmedabad bench approved the merger plan between Vodafone and Idea Cellular.

“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.

“Considering the entire facts and circumstances of the case and on perusal of the Scheme and the proceedings, it appears that the requirements of the provisions of sections 230-232 of the Companies Act, 2013 are satisfied. The scheme is genuine and bona fide and in the interest of the shareholders and creditors,” NCLT said on Thursday.

Idea shares erased losses and rose as much as 2.9% on BSE Sensex. Shares closed up 1.35% or 1.45 points to Rs 108.60 apiece on the BSE Sensex.

The Tribunal has approved consolidation of the telecommunications business and higher spectrum availability between the companies.

Vodafone promoters will hold a minimum of 45.1% shareholding while Idea Cellular promoters will hold 26%, the report read.

Idea-Vodafone merger has also received the approval of the Competition Commission of India.

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

Post-merger, the Idea-Vodafone entity is expected to surpass Bharti Airtel and create the largest telecom firm in India with a little over 40 crore subscribers.

The $23 billion merger deal between the two operators was estimated to come to a close in the first half of 2018.