New Delhi, Nov. Nov 5 (IANS): Bharti Airtel has called off its Rs.700-crore deal to acquire Mumbai-based Loop Mobile.
"Yes, it is true that Bharti Airtel has called off the deal," Surya Mahadevan, chief operating officer of Loop Mobile, told IANS.
Through this deal, Bharti Airtel would have acquired business and assets of Loop Mobile. A definitive agreement for this was signed in February 2014. But like every other definitive agreement, this too was time-bound and was due to expire Oct 30, 2014.
These agreements also get renewed if both parties mutually agree to do so. But in this instance, it was not so, the source explained.
Loop and Bharti Airtel applied to the Department of Telecom (DoT) in March for approval. But the DoT is yet to give its nod to the deal as Loop Mobile and Loop Telecom owe around Rs.808 crore to the government in spectrum and other charges.
"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The approval for the transaction is still awaited from the relevant authorities, as a result of which Bharti Airtel has withdrawn from the proposed transaction, causing huge loss to the company. Therefore, Loop Mobile will not be able to migrate its subscribers to Airtel as originally envisaged," a statement issued by Loop Mobile said.
Going by the definitive agreement, Bharti Airtel would have added Loop Mobile's three million customers (at the time of signing the agreement) in Mumbai after acquisition. Loop's permit in Mumbai expires Nov 29, 2014. The company had around 17 lakh customers till August.
"Loop Mobile chose not to participate in the spectrum auction conducted in February 2014 as the conditions of auction forced it to bid for 900 MHz frequency spectrum, which it held," the statement said.
Loop Mobile has applied to the Telecom Regulatory Authority of India (TRAI) for release of additional porting codes (UPC) for facilitating port-out of all its subscribers.
"Loop Mobile licence expires on Nov 29, 2014, and in order to ensure that minimum inconvenience is caused to customer the company is working towards smooth transition of all its existing subscribers," it said.
Bharti Airtel was immediately unavailable for comment.
The company's stocks closed at Rs.385.30 a share Wednesday in the Bombay Stock Exchange, down 2.70 percent.