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Vodafone Idea board approves merger of two subsidiaries with the company

May 15, 2019
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As per a regulatory filing, Vodafone Idea Limited’s board of directors have approved a scheme of amalgamation of its two wholly owned subsidiaries, Vodafone India Digital Limited (VIDL) and Idea Telesystems Limited (ITL) with the company. The scheme was approved at the company’s meeting held on May 13, 2019 under the relevant provisions of the Companies Act, 2013. The filing stated that the scheme will not result in any change in Vodafone Idea’s shareholding pattern.

According to Vodafone Idea, the rationale behind the scheme includes simplification of the corporate structure; better, efficient and economical management and control over running the businesses of the subsidiaries; elimination of duplication in administrative cost and multiple record keeping which would result in cost savings, increased operational efficiencies and administrative convenience; and creating better synergies across the group for optimal utilisation of resources and obtaining economies of scale.

While VIDL is a wholly-owned subsidiary of Vodafone Idea, the transferee company, and is a non-operating company, ITL is primarily engaged in the business of wholesale trading of data cards. VIDL and ITL had a networth of Rs 200 million and Rs 3 million as of March 2019. During the same period, Vodafone Idea's networth stood at Rs 427.78 billion.

The scheme of amalgamation is currently subject to approval of the National Company Law Tribunal, Ahmedabad, besides other regulatory authorities.

 
 
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