Shares of Tata Teleservices jumped a whopping 17 per cent after the Mumbai-based company announced that the Department of Telecommunication (DoT) has approved the merger of consumer mobile business undertaking of the company into Bharti Airtel Limited. The deal comes to a close after more than a year of its announcement by the two telecom operators. The National Company Law Tribunal (NCLT) had approved the order in December 2018.
“The Department of Telecommunications vide their letter dated February 6, 2020, has conveyed approval of the Competent Authority in DoT for taking on record demerger of Consumer Mobile Business Undertaking of the Company into Bharti Airtel Limited in terms of the Composite Scheme of Arrangement between the Company and BAL which was approved by the respective Shareholders and Creditors,” said Tata Teleservices in a press release.
With the approval, Airtel will take over Tata Teleservices owned consumer mobile business. Earlier when Bharti Airtel had announced the deal, telecom regulator DoT had asked the company to submit bank guarantees to the tune of Rs 8,000 crore before it takes the deal on record. the Telecom Disputes Settlement and Appellate Tribunal (TDSAT) had direct the DoT to accept the merger and take it on record.
The approval for the deal comes after DoT approached the Supreme Court, where too the deal was given a green light. According to reports, Airtel will now absorb Tata Teleservices’ CMB operations in 19 telecom circles – 17 under TTSL and 2 under Tata Teleservices (Maharashtra) Ltd. It also agreed to take over a small portion of the unpaid spectrum liability of Tata Teleservices. The merger bolsters Airtel’s radiowaves pool with an additional 178.5 MHz spectrum in 1800, 2100 and 850 MHz bands, widely used for 4G.
With a 17 per cent jump, Tata Teleservices settled at a price of Rs 3. Benchmark indices Sensex and Nifty are down today. 30-stock Sensex was trading down by 135.96 or 0.31 per cent while Nifty 50 was slumped 34.85 or 0.29 per cent.