Bharti Airtel calls off Rs 700 cr deal to acquire Loop Mobile
Telecom major Bharti Airtel has called off its plans to acquire business and assets of Mumbai based Loop Mobile, for about Rs 700 crore, as the Department of Telecom is yet to clear the deal.business Updated: Nov 05, 2014 15:07 IST
Telecom major Bharti Airtel has called off its plans to acquire business and assets of Mumbai based Loop Mobile, for about Rs 700 crore, as the Department of Telecom is yet to clear the deal.
"Loop Mobile and Bharti applied to DoT for approval of the business transfer in March 2014. The approval for the transaction is still awaited from the relevant authorities as a result of which Bharti Airtel has withdrawn from the proposed transaction causing huge loss to the company," Loop Mobile spokesperson told PTI.
DoT is yet to give clearance to the deal as it estimates that Loop Mobile and its sister concern Loop Telecom owe about Rs 808 crore in spectrum and other charges to the government.
Loop Mobile's permit in Mumbai is expiring on November 29 and the company did not purchase spectrum in February auction which was mandatory for continuing its operations.
Airtel had signed a deal with Loop in February this year to buy business and assets of Loop Mobile in Mumbai under a strategic agreement for about Rs 700 crore.
Under the agreement, Loop Mobile's 3 million subscribers (at that time) in Mumbai were suppose to join Airtel's over 4 million subscribers, making it largest network in the metropolitan city.
Loop Mobile will not be able to migrate its subscribers to Airtel as originally envisaged.
No immediate comments were received from Airtel.
Private sector lender Axis Bank has told the DoT that Rs 215-crore loan to Loop Mobile will be at risk if the deal of the Mumbai-based operator to sell its assets to Bharti Airtel is not approved.
A consortium led by Axis Bank had given advanced loans of Rs 350 crore to Loop Mobile and the current outstanding stood at Rs 215 crore, according to a communication by the bank to DoT.
Loop Mobile has applied to Telecom Regulatory Authority of India (TRAI) for release of additional porting codes for facilitating port-out (transfer) of all its subscribers.
The company had over 17 lakh customer in August as per data released by TRAI.