Shares of telecom firm Idea Cellular slipped 7.5 percent intraday Monday as its merger with Vodafone India may miss the deadline of June 30.
The mega-merger may not meet the expected June 30 timeline as the telecom department is looking to raise a fresh demand of around Rs 4,700 crore, a source said. The demand will be raised from Vodafone India before its merger with Idea Cellular.
"Vodafone India had merged its all arm into one company and there are dues of around Rs 4,700 crore related to one-time spectrum charges (OTSC) on the company. DoT will ask Vodafone to either clear dues or furnish bank guarantee before merger with Idea," an official source told PTI.
In 2015, Vodafone had merged its four subsidiaries Vodafone East, Vodafone South, Vodafone Cellular and Vodafone Digilink with Vodafone Mobile Services, which is now called Vodafone India.
DoT at that time has asked Vodafone to clear OTSC dues worth Rs 6,678 core but the company challenged it in court. Following Supreme Court order, Vodafone had paid only Rs 2,000 crore to get the deal cleared.
The telecom minister Manoj Sinha is learnt to have asked DoT (Department of Telecommunications) to take legal opinion whether a demand regarding OTSC dues can be sought from Vodafone India.
"The DoT has received legal opinion which affirms that a demand can be raised from Vodafone," the source said.
The official said that final amount is still being worked out, which may involve interest as well and it is likely to be raised next week.
"DoT is working on fresh demand expeditiously and may issue it next week. The demand note will have to be drafted meticulously and there are lot of complexity involved. Therefore, DoT needs some time," the officer said.
The demand will be in addition to bank guarantee of around Rs 2,100 crore that DoT will seek from Idea for OTSC dues.
Both Idea and Vodafone were expecting the merger deal to create India's largest telecom company to be completed by June 30, 2018.
The merger company is proposed to be named as Vodafone Idea Limited if approved by shareholders of Idea Cellular. It is estimated to have over 40 crore mobile customers from day 1 and 41 per cent revenue market share.
Vodafone Group and existing promoters of Idea will hold 45.1 and 26 per cent of the equity share capital of the merged company, respectively and the balance 28.9 per cent will be held by the public shareholders.
At 14:52 hrs Idea Cellular was quoting at Rs 56, down Rs 4.55, or 7.51 percent on the BSE.
With inputs from PTI
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