Bharti Airtel Cancels Loop Mobile Acquisition
Bharti Airtel has cancelled its plans of acquiring Mumbai-based Loop Mobile. The deal was worth INR 7 billion and was awaiting clearance from Department of Telecommunication.
“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The approval for the transaction is still awaited from the relevant authorities as a result of which Bharti Airtel has withdrawn from the proposed transaction causing huge loss to the company,” said Loop Mobile spokesperson, according to Press Trust of India.
Loop Mobile’s permit is expiring November 29. Mumbai’s oldest telecom operator Loop did not participate in the spectrum auctions held in February this year and so, will have to shut down services this month. Loop entered into a deal with Bharti Airtel in February, 2014. Under the agreement, the telecom major would get Loop’s 3 million subscribers plus 25,000 cell sites.
DoT hasn’t cleared the transaction, saying that Loop Mobile and its sister company Loop Telecom owe the government around INR 8 billion.
The cancellation is also expected to affect banks that were involved in the deal. Axis Bank- a private lender- has told DoT that its INR 2.15 billion loan to Loop Mobile will be at risk if the deal is cancelled.