Bharti Airtel’s bid to acquire Telenor India looks set to go ahead following a ruling by India’s Supreme Court.
Prior to the ruling, India’s Department of Telecommunications (DoT) was attempting to block a directive from the Telecom Disputes Settlement and Appellate Tribunal that would have enabled the DoT to clear the acquisition without Airtel having to provide a bank guarantee of INR15 billion ($222 million).
Before granting its approval to the acquisition, the DoT was looking to secure a guarantee from Airtel equivalent to what the operator would have paid for a one-off allocation of spectrum outside of an auction. The Telecom Disputes Settlement and Appellate Tribunal had overruled this request, and the DoT was in turn seeking to block this decision.
However, the Supreme Court has now thwarted the DoT’s efforts, meaning that the long-awaited deal can progress to its final stages. A lawyer attending the case was quoted by the Economic Times as saying: “The consequence is that the deal will go through immediately.”
The DoT’s demands were not completely overruled, however. Its request that Airtel pay over INR2 billion for the deferred payment of spectrum owned by Telenor India has been met, with the operator making the payment.
Airtel originally agreed to acquire Telenor India in February 2017, and the proposed deal has since been approved by the Competition Commission of India, the Securities & Exchange Board of India, and the National Company Law Tribunal, as well as the Indian stock exchanges.
However, major delays in the approval processes have led to financial difficulties for Telenor India which threatened to force the operator into opening bankruptcy proceedings. This in turn led to reports that the deal could be shelved. Telenor itself has said that it expects to close the deal in the current quarter.