National Company Law Tribunal
(NCLT)'s Ahmedabad bench on Monday ordered Idea Cellular Ltd to convene a shareholders-cum-creditors meet on October 12, for the purpose of voting for its proposed $23 billion (Rs 1.47 lakh crore roughly) merger with Vodafone India Ltd (VIL).
As an independent person to chair the meeting, former chief justice of Bombay High Court (HC) Justice M H Shah
has been appointed by the NCLT.
The meeting will see shareholders and creditors voting for or against the merger.
On March 20, both Idea Cellular's parent Aditya Birla Group
and Vodafone India Ltd (VIL) had announced their merger, with Kumar Mangalam Birla as the chairman of the new entity.
Post merger, Vodafone will own 45.1 per cent stake in the new entity while Aditya Birla Group, will have 26 per cent after paying Rs 3,874 crore cash for a 4.9 per cent stake. The remaining 28.9 per cent will be held by other shareholders.
After new shares are issued in Idea to Vodafone, resulting in Vodafone deconsolidating Vodafone India Ltd, the merger is set to facilitate VIL as well as Vodafone Mobile Services
Ltd (VMSL)'s businesses being vested in the new entity. However, the deal excludes VIL's 42 per cent share in Indus Towers.
Already the merger has cleared hurdles in form of regulatory approvals. While on July 24, the Competition Commission of India (CCI) gave its nod for the merger, on August 4, Securities and Exchange Board of India (Sebi) gave a conditional go ahead for the $23 billion merger deal, subject to outcome of ongoing probe by the regulator and approvals from shareholders and NCLT.
Sebi is examining allegations of one of the Idea Cellular promoters purchasing 0.23 per cent shares of the company before the merger announcement with the transactions being in violation of securities laws, according to a complaint received by the regulator.
On August 7, Idea Cellular had filed an application before the NCLT's Ahmedabad bench, regarding the same.
It needs to be mentioned here that according to an earlier exchange filing by Idea Cellular, "The merger pegs implied enterprise value of Rs 82,800 crore or $12.4 billion for Vodafone India and Rs 72,200 crore or $10.8 billion for Idea."
Idea-Vodafone merger so far:
March 20: Idea Cellular, Vodafone India announce merger
July 24: Competition Commission of India approves the merger
August 4: SEBI gives conditional go-ahead for the merger
August 7: Idea files application at NCLT's Ahmedabad bench
August 21: NCLT
orders Idea to convene shareholders-creditors meet on October 12
August 21: NCLT
appoints former chief justice of Bombay High Court M H Shah
as chairman of the meet