A Vodafone Idea plan to raise funds from the sale of its stake in a combined Indus Towers-Bharti Infratel entity to pay government dues ran into new obstacles, as outstanding approvals for the merger may not come fast enough.

While the Department of Telecommunications granted foreign direct investment approval, the merger still requires clearance from the National Company Law Tribunal and would then need to be registered by the Registrar of Companies, which could take two to three months, The Economic Times (ET) reported.

Vodafone Idea is expected to raise INR45 billion ($625.9 million) from the sale of its stake in the merged company to pay part of the INR530 billion it owes the government in adjusted gross revenue (AGR), which is now due 17 March after the Supreme Court set a new deadline.

An industry source told ET it would be next to impossible for the operator to cash-in its Indus Towers stake by the deadline as key approvals are pending,

In April 2018, Bharti Airtel agreed to combine its tower business with Indus Towers. Airtel and Vodafone Group each holds a 42 per cent stake in Indus Tower, while Vodafone Idea holds an 11 per cent interest.

The proposed merger ran into a major obstacle in October 2019 as shareholders squabbled over the pricing structure of the deal.

Bharti Infratel’s board was scheduled to meet today (24 February) to discuss extending the merger deadline a third time as it waits for final regulatory approvals, ET said.