What's Happening?
Bharti Hexacom, a subsidiary of Bharti Airtel, has received approval from the majority of its shareholders to sell 3,400 telecom towers to Indus Towers. This decision comes after initial opposition from Telecommunications Consultants India Ltd (TCIL), a minority shareholder holding a 15% stake in Hexacom. TCIL had previously halted the deal due to disputes over the valuation of the towers, demanding a new valuation before proceeding. The sale is part of a larger transaction where Indus Towers agreed to purchase 12,700 towers from Bharti Airtel and 3,400 towers from Hexacom for INR33.087 billion (US$378 million). The Hexacom portion of the deal was initially valued at INR11.34 billion (US$130.4 million). According to a regulatory filing, 88.28% of Hexacom shareholders voted in favor of the sale at the company's 30th annual general meeting.
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Why It's Important?
The approval of the tower sale to Indus Towers is significant for Bharti Hexacom as it allows the company to streamline its operations and focus on its core services, including consumer mobile services, fixed-line telephone, and broadband services. For Indus Towers, acquiring these towers enhances its infrastructure capabilities, potentially improving service delivery and expanding its market presence. The deal also reflects the ongoing consolidation in the telecom sector, which can lead to more efficient use of resources and better service offerings for consumers. However, the initial opposition from TCIL highlights the complexities involved in such transactions, particularly regarding asset valuation and shareholder interests.
