March 20, 2017 / 7:34 AM / 9 months ago

BRIEF-Idea Cellular board approves merger with Vodafone India

March 20 (Reuters) - Idea Cellular Ltd:

* Says board approved scheme of amalgamation of Vodafone India and its unit Vodafone Mobile Services Ltd with co

* Entire business of VIL and VMSL, excluding VIL’s investment in Indus Towers, international network assets and IT platforms, to vest in co

* On amalgamation of VMSL becoming effective, co shall issue shares of co to VIL equal to 47 percent of post issue paid-up capital of co

* Vodafone to own 45.1 percent of combined co after transferring about 4.9 percent to promoters of Idea and/or affiliates for INR 38.74 billion in cash

* Promoters of Idea, Vodafone have right to nominate 3 directors each

* Promoters of Idea have sole right to appoint chairman

* Appointment of CEO, COO will require approval of both promoters of Idea and Vodafone

* Vodafone has right to appoint CFO of company

* Promoters of Idea have right to buy up to 9.5 percent additional stake from Vodafone under agreed mechanism with view of equalising shareholdings over time

* Agreement contemplates completion of proposed amalgamation with a period of 24 months

* Until equalisation is achieved, voting rights of additional shares held by Vodafone will be restricted and votes will be exercised jointly

* Idea to contribute all of its assets including standalone towers with 15.4k tenancies and 11.15 percent stake in Indus Towers

* Vodafone to contribute Vodafone India including standalone towers with 15.8k tenancies but excluding 42 percent stake in Indus Towers

* Vodafone will contribute 25 billion rupees more net debt than Idea at completion

* Post-closing, combined company will be reported as a JV by Vodafone and accounted for under equity method

* As combined entity will be jointly controlled by Vodafone & Aditya Birla Group, Vodafone will deconsolidate Vodafone India immediately

* Transaction expected to be accretive to Vodafone’s cash flow from the first full year post completion

* Parties also anticipate some regulatory dis-synergies

* Board of combined entity will be comprised of 12 directors including 3 directors appointed by each of Vodafone and Aditya Birla Group Source text: Further company coverage:

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