Group's shareholdings in the combined company are not equal after four years, Vodafone will sell down shares in the combined company to equalise its shareholding to that of the Aditya Birla Group over the following five-year period.
Group's shareholdings in the combined company are not equal after four years, Vodafone will sell down shares in the combined company to equalise its shareholding to that of the Aditya Birla Group over the following five-year period.
Until equalisation is achieved, the voting rights of the additional shares held by Vodafone will be restricted and votes will be exercised jointly under the terms of the shareholders' agreement.
Given the present spectrum holding, revenue and subscriber base, both the companies need to work on synergy to comply with rules.
According to the merger and acquisition rules, an entity should not hold more than 25 per cent spectrum allocated in a telecom circle and 50 per cent of spectrum allocated in a particular band in a service area.
The merged entity should also not have more than 50 per cent revenue and subscriber market share.
As per CLSA report, the merged entity would breach revenue market share, subscriber and spectrum caps in five markets.
The combined entity as per present scenario will breach spectrum cap in 900 Mhz band in Maharashtra, Gujarat, Kerala, Haryana and UP West and in 2500 Mhz band in Maharashtra and Gujarat, it said.
CLSA estimated that the excess spectrum which would need to be surrendered or sold off is valued around Rs 5,400 crore and for the merger both the companies will also have to shell out Rs 5,700 crore for liberalising radiowaves that they were allocated administratively.
(This article has not been edited by DNA's editorial team and is auto-generated from an agency feed.)
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