Idea Cellular firms up on wrapping up tower sale

Idea Cellular rose 1.22% to Rs 62.40 at 10:52 IST on BSE after the company announced completion of sale of standalone tower business to ATC Telecom Infrastructure.

The announcement was made after market hours yesterday, 31 May 2018.

Meanwhile, the S&P BSE Sensex was up 42.01 points, or 0.12% to 35,364.39.

On the BSE, 4.35 lakh shares were traded in the counter so far compared with average daily volumes of 10.95 lakh shares in the past two weeks. The stock had hit a high of Rs 63.20 and a low of Rs 62.05 so far during the day. The stock hit a 52-week high of Rs 118 on 5 January 2018. The stock hit a 52-week low of Rs 50.05 on 14 May 2018.

Idea Cellular announced the completion of sale of its pan-India standalone tower business, by way of divesting its entire stake in ICISL (100% subsidiary of Idea), to ATC Telecom Infrastructure (ATC). The transaction has been closed with an enterprise value of Rs 4000 crore for approximately 9,900 standalone towers.

Vodafone's sale of its standalone tower business to ATC has already been completed earlier for an enterprise value of Rs 3850 crore. Post the completion of Vodafone India and Idea merger, ~6,300 co-located tenancies of the two operators on the combined standalone tower portfolio will collapse into single tenancies over a period of two years without the payment of exit penalties. Both Vodafone India and Idea as customers, and ATC as a vendor, have agreed to treat each other as long-term preferred partners, subject to existing arrangements.

The receipt of both these proceeds prior to completion was anticipated and provided for, in the Vodafone India and Idea merger agreement and hence would not affect the agreed terms of the merger, including the amount of debt which Vodafone will contribute to the combined entity at the closing of merger transaction.

With this both Idea and Vodafone India have now monetised the standalone tower assets for a total enterprise value of Rs 7850 crore, as per the timelines provided at the time of the announcement in November 2017, strengthening the financial position of the merged entity.

On a consolidated basis, Idea Cellular reported net loss of Rs 962.20 crore in Q4 March 2018 as against net loss of Rs 327.70 crore in Q4 March 2017. Net sales declined 24.51% to Rs 6121.50 crore in Q4 March 2018 over Q4 March 2017.

Idea Cellular is the third largest wireless operator by subscribers in India with a revenue market share (based on AGR) of approximately 17.1% of the Indian mobile telecommunications services industry (excluding wireline revenue for Bharat Sanchar Nigam and Mahanagar Telephone Nigam) for the Q3FY18.

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