India’s Supreme Court dismissed an effort by the Department of Telecommunications (DoT) to require Bharti Airtel to provide a bank guarantee of INR15 billion ($222 million) as a condition for approving the market leader’s bid to acquire Telenor India, The Economic Times (ET) reported.
The decision paves the way for the long-awaited deal to be finalised, the newspaper said. The court rejected DoT’s bid to halt a directive by the Telecom Disputes Settlement and Appellate Tribunal for DoT to clear the acquisition of Telenor’s unit without requiring Airtel to have a guarantee.
A lawyer attending the proceedings told ET: “The consequence is that the deal will go through immediately.”
To approve the buyout, DoT asked Airtel to provide a bank guarantee equal to one-time charges for spectrum allocated without an auction and pay more than INR2 billion for deferred payment for spectrum owed by Telenor India, ET reported.
The Telecom Disputes Settlement and Appellate Tribunal turned down the guarantee request, but Airtel paid the INR2 billion for Telenor’s spectrum.
Airtel agreed the deal to acquire Telenor India in February 2017. The acquisition received approvals from the Competition Commission of India, the Securities & Exchange Board of India, the National Company Law Tribunal and the country’s stock exchanges.
Media reports last month, however, suggested the deal could be derailed as lengthy delays in the approval process and mounting losses could force the Norway-based group’s business to begin bankruptcy proceedings,
Telenor said in its Q1 2018 earnings call it still expects the deal to go through, citing the current quarter as a likely completion date.