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Corporate

Corporate news, corporate developments and various announcements by corporates. Under this we also bring you regulatory developments of corporates and track their financial results including the quarterly as well as annual results. Besides, hiring and appointments by various corporates and enterprises are also featured in this section.

M&A

Bharti Infratel, Indus Towers Merge; Idea Out Of New Firm

bharti-infratel-hoarding

Bharti Airtel Wednesday said its tower arm Bharti Infratel has now merged with Indus Towers. The combined entity will be called Indus Towers Limited and will be the largest telecom tower company in the world.

Before the merger, Bharti Infratel had 39,523 towers and Indus Towers has 123,639 towers. Combined, they will be having 163,162 towers and will operate in all 22 circles o fthe country. Earlier, Bharti Infratel and Indus Towers were operating in 7 and 15 circles respectively.

Airtel, in October last year, had announced that its nterested in merging Bharti Infratel with Indus Towers and the deliberations are going on. The new announcement said the closure is subject to approval from the concerned authorities and may happen before March, 2019.

Structure of The New Firm

Bharti Airtel currently holds 53.5% stake in Bharti Infratel and the rest 46.5% are with the public. Indus Towers is joint venture between Bharti Airtel, Vodafone India and Idea Cellular and they hold 42%, 42% and 11.15% respectively in the firm. The rest 4.85% is being held by Providence Group.

Post the merger, Bharti Airtel and Vodafone India will merge their shares to have equivalent shares in the new entity and Idea Cellular will sell its stakes and move out from the new tower company.

In the new company or Indus Towers Limited, Bharti Airtel will have 37.2% stake where as Vodafone will have 29.4%, Providence will have 1.1% and the rest 32.3% will be with the public. The new entity will remain as a listed company and will trade on Indian bourses, a Bharti Airtel statement said.

Joint Management

Bharti Airtel and Vodafone will have equal rights in the combined company. They have entered into a shareholders’ agreement and it is expected that the combined company’s articles of association will be amended at completion to reflect some of these rights.

Following completion, the Board of the combined company will comprise of 11 directors, of whom three will be appointed by each of Bharti Airtel and Vodafone, one will be appointed by KKR/Canada Pension Plan Investment Board and four (including the Chairman) will be independent. The management team will be confirmed prior to closing.

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Results

Bharti Infratel FY18 Revenue Up 8%, Profit Dip By 9%

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Bharti Airtel’s independent tower arm Bharti Infratel Monday announced its financial results for the fourth quarter as well as for the full year ended March 31, 2018. On year or year basis, the firm, India’s only listed tower company, saw its revenue grew by 8% but its net profit was down by 9%.

The firm reported consolidated revenues of Rs. 14,490 crore in FY17-18 as against Rs 13,424 crore in the previous year, showing a growth of 8%. Consolidated EBITDA of the firm improved to Rs. 6,427 crore up 8% Y-o-Y, representing an operating margin of 44.4%. Consolidated EBIT improved to Rs. 4,034 crore up 11% Y-o-Y. The Operating Free Cash Flow grew by 13% Y-o-Y to Rs. 4,202 Crore for the year.

Bharti Infratel, however, posted a dip in its net profit during the year. The company’s net profit for the year FY2017-18 was Rs 2494 crore as against Rs 2747 crore in the previosu fiscal showing a dip of 9%.

“Due to loss of 22,134 co-locations during the year on account of five operators ceasing to continue either on account of shutting down operations or merging with others, the financial results for the quarter showed lower growth rates,” the company said in a statement.

On quarterly basis, the firm reported revenues of Rs 3662 crore for the period 31 March, 2018, an increase of 4% than the previous quarter when it reported frevenues of Rs 3520 crore. The net profit saw an increase of 2% to clock Rs 606 in the quarter as against Rs 597 crore in the December quarter.

“The year gone by saw unprecedented consolidation in the Indian telecom industry with five operators ceasing to exist either on account of mergers or outright shut down of operations. Our Company saw loss of 22,134 co-locations on this account during the year. However, despite this the overall performance for the year vs. last year has been robust which bears testimony to a sound business model and our leadership position. We believe that with rapidly growing data demand which would require large network rollouts, we are poised for a strong potential in the coming years. We are fully prepared to exploit this and meet all requirements of our customers for speedy rollouts,” said Akhil Gupta, Chairman, Bharti Infratel.

The company also announced dividend of Rs 14 per equity share for the year ended March 2018,

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Announcements

L&T Technology Services Bags Digitalization Contract From ExxonMobil

L&T technology services

L&T Technology Services, the IT and technology arm of L&T or Larsen and Toubro, Monday said it has bagged a multi-million dollar contract from ExxonMobil. The pure-play engineering R&D services company has signed an agreement with ExxonMobil Exploration Company, valued at more than $20 million in the first year.

“Combining our Hydrocarbon heritage, geospatial domain understanding and our digital engineering expertise, we are ideally positioned to help ExxonMobil in this initiative. Our solutions will provide geoscientists accelerated insights into their subsurface data. This in turn maximizes asset utilization, minimizes data preparation time and reduces total cost of ownership,” said Dr Keshab Panda, CEO & Managing Director, L&T Technology Services Limited.

LTTS’ geospatial and digital expertise will enable rapid conversion of historical Geoscience content into the digital domain by leveraging sophisticated automation utilities. This will provide geoscientists with improved data availability, enhancing the speed and efficiency of analysis and evaluation. LTTS will work in collaboration with group company Larsen & Toubro Infotech (LTI) on this engagement.

This deal re-affirms LTTS’ technology investment strategy for its flagship customers and ensures its position as a leading partner among top ER&D service providers by capitalizing on the rapidly changing digital shifts in the Oil and Gas industry.

L&T Technology Services, headquartered in India employs over 12,000 people and serves global customers including 52 Fortune 500 companies through its 16 global delivery centers and 28 global sales offices across the globe.

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M&A

Vodafone India Completes Sale of Tower Business To ATC

Vodafone India

Vodafone India, which is inches short of closing its merger deal with Idea Cellular, on Tuesday completed one more step towards that goal. It has completed the sale of its standalone tower business to ATC for Rs 3850 crore.

“Further to the announcement dated 13 November 2017, Vodafone India has completed the sale of its standalone tower business in India to ATC Telecom Infrastructure Private Limited (“ATC”) for an enterprise value of Rs 38.5 billion (€ 478 million),” Vodafone said in a statement.

The company had announced on 13 November 2017 to sale its tower business along with the same of Idea Cellular’s to ATC (American Tower Corp) for Rs 7850 crore of $1.2 billion. Now that Vodafone’s tower business sale is completed, a similar announcement is expected from Idea Cellular in coming times.

Vodafone, in its statement said, Idea Cellular’s tower business sale would be completed in the first half of 2018.

“In the Vodafone India / Idea merger announcement of 20 March 2017, both parties announced their intention to sell their individual standalone tower businesses to strengthen the combined financial position of the merged entity. The merger is expected to complete in the first half of the current calendar year,” the statement added.

The tower sale deal involves sale of more than 20,000 telecom towers, belong to both the operators, to ATC. As part of the transactions, Vodafone and Idea Cellular would get the service level and process efficiency benefits from American Tower, means these two telecom operators would continue to get usual service from these tower sites.

Similarly, American Tower will have certain preferential rights for future new business commencements on its existing portfolio and on the sites being acquired in certain Indian markets.

The Vodafone India -Idea merger remains a mere formality now. All the necessary approvals have been received by the firms. The firms have already announced the new executive team who would be at the helm of affairs of the merged entity.

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Results

HTC Q4 Loss Triples, Company Blames Market Competition

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Taiwanese smartphone maker HTC posted a net loss of 9.8 NTD billion (New Taiwan Dollar) in Q4 ended 31 December 2017 from 3.1 NTD billion a year ago, showing a three fold dip. The company blamed various market forces for this financial disturbances.

“Quarterly loss due to market competition, product mix, pricing and recognized inventory write-downs,” HTC said in a statement. The company said as its $1.1 billion asset sales to Google was completed during end of January the related sales numbers were not added to the Q4 results.

“HTC successfully completed the US$1.1 billion business cooperation agreement with Google at the end of January, and the gain related to the transaction will be recognized in Q1’18,” HTC added.

On gross revenue terms, HTC saw a dip of over 29% in Q4 2017. It posted revenues of 15.7 TND billion in Q4 2017 as against 22.2 NTD billion a year ago.

However, the company has reduced its operating expenses to 4.7 TND billion in the reported period from 5.9 NTD billion during the same period last year. In operating expenses the company has done some cost cutting in sales and marketing as well as in general administration. But the firm that is known for its R&D capabilities has retained its expenses on this activities. Its expense on R&D in 2016 was 2.7 NTD billion and in 2017 the firm has spent 2.6 NTD billion on the same.

Going forward, HTC said, it has reviewed its business to optimize teams and processes. Regional markets are brought under single leadership which, HTC feels, would build greater coordination of its smartphone and virtual reality businesses.

On VR side, the company said there has been significant innovation over this period. It has launched the VIVE Focus standalone VR system in China, and the VIVE Pro premium PC VR system in January at the Consumer Electronics Show (CES) in Las Vegas in January 2018.

With a clear product focus and a series of measures in place to enable stronger execution, HTC believes it is positioned well for another strong year of innovation at the forefront of its markets

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M&A

RIL Acquires Saavn For Rs 805 crore, To Integrate With Jio Music

Saavn New logo

Reliance Industries (RIL) Friday announced that it has acquired digital music provider Saavn for little over Rs 805 crore. The company in a late evening announcement said it acquired 41.1% stake in the music firm in a cash deal.

Further, the company said that it has also entered into an agreement to transfer the music streaming business of RIL -JioMusic – to Saavn India (by way of a slump exchange) in exchange for the issuance of 376,980 equity shares of the music firm to RIL, thereby giving RIL an effective equity stake of 81.7% in the digital music firm.

“The investment and combination of our music assets with Saavn underlines our commitment to further boost the digital ecosystem and provide unlimited digital entertainment services to consumers over a strong uninterrupted network. We are delighted to announce this partnership with Saavn, and believe that their highly experienced management team will be instrumental in expanding Jio-Saavn to an extensive user base, thereby strengthening our leadership position in the Indian streaming market,” said Akash Ambani, Director, Reliance Jio.

The digital music company is engaged in business of digital streaming of music through its mobile apps and website.

Saavn India, a company incorporated in India on 26 August 2011, had revenues of Rs. 42.4 crore, Rs 29.7 crore and Rs. 16.9 crore in the financial years 2016-17, 2015-16 and 2014-15 respectively. Saavn LLC is a limited liability company formed in the State of Delaware, United States and had revenues of US$ 5.72 million and US$ 3.44 million in the calendar years 2016 and 2015 respectively.

The US incorporated entity will become a wholly owned subsidiary of the Indian firm, and an indirect subsidiary of RIL, pursuant to the transaction.

The transaction would accelerate RIL’s journey towards having a bouquet of unparalleled media and entertainment services in its portfolio and provide unmatched experience to the users of its digital services business.

The transactions related to Saavn are expected to be completed before June 30, 2018, subject to completion of conditions precedent, and do not require statutory/ regulatory approvals

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M&A

Cognizant Acquires Bolder Healthcare Solutions

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Nasdaq listed IT services major Cognizant Monday announced to acquire Bolder Healthcare Solutions, a US based firm having interest in healthcare services. The privately-held firm is provider of revenue cycle management (RCM) solutions to hospitals, physician practices and other specialist healthcare organizations in the United States.

Cognizant did not offer any financial details of the deal. The transaction is expected to close in the second quarter of 2018, the company said in a statement.

RCM software and processes integrate and automate healthcare administrative and medical data to ensure benefit eligibility and accurate billing and collections, greatly reducing the time between delivery of service to payment received. Louisville, Kentucky-based Bolder Healthcare Solutions is one of the fastest growing RCM companies, serving many of the largest U.S. health systems. Their RCM offerings will further expand Cognizant’s leading healthcare consulting, IT and business process services into more hospitals, hospital outpatient departments, physician practices, and other specialty care providers.

Bolder Healthcare Solutions will enable Cognizant to expand its range of digital solutions across the healthcare value chain and address the large provider segment of the U.S. healthcare market.

“As the healthcare industry continues to undergo significant transformation to a value-based care model, digital RCM services and solutions remove complexity and allow providers to streamline their operations,” said Kaushik Bhaumik, Executive Vice President and Global Head of Healthcare at Cognizant.

Michael Shea, CEO of Bolder Healthcare Solutions, said, “By joining forces with Cognizant, we will have many new tools that will be a catalyst for future growth. The increased capabilities will allow Bolder to continue to be on the cutting edge of provider RCM and this forward looking combination will create new opportunities for Cognizant in the hospital provider, specialty physician, and other professional markets. We are bringing together an impressive level of expertise, best-in-class processes and technologies to help providers meet the many challenges they face.”

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M&A

Nokia Acquires Unium To Enhance Home Wi-Fi Offerings

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Nokia today announced plans to acquire Unium, a US-based software company that specializes in solving complex wireless networking problems for use in mission-critical and residential Wi-Fi applications.

The privately held WiFi company was founded in 2002 and is located in Seattle, Washington and the transaction is expected to close in Q1 2018, Nokia said in a statement.

The acquired firm’s software and intelligent mesh wireless technology complements and strengthens Nokia’s end-to-end, whole-home Wi-Fi solution and supports Nokia’s strategic objective of solving Wi-Fi problems in the home. Unium will bring Nokia field-proven, carrier-grade mesh technology that helps maximize in-home wireless networking speeds and ensures quality of experience across the entire home. Its underlying technology is already tested and used in a number of applications where high availability, performance and resilience is a must.

The WiFi firm looks at the network, providing a fast, frustration-free and reliable Wi-Fi experience that simply works. Its Wi-Fi home solution is plug & play and highly intuitive. New devices can easily connect to the Wi-Fi network without degrading connectivity. Fast roaming gives consumers the ability to walk around the home without service interruptions.

Unium’s software offers intelligent mesh, band steering, fast roaming and a choice of Wi-Fi or Ethernet backhaul. It measures wireless performance in real time, and dynamically adjusts the network to improve the user’s coverage and capacity. Unium’s Wi-Fi software learns the specific capabilities and performance of each device (phone, tablet, etc.) so it can optimize each connection and provide a tailored customer experience. The intelligent mesh network enables gigabit-plus capacity throughout the home.

“Nokia and Unium are ready to unlock the full potential of the connected home, creating a residential network that understands the people, devices and applications it serves. Together, they can deliver gigabit speeds not only to the home, but also throughout the home,” the Finnish firm added.

Federico Guillén, president of Nokia’s Fixed Networks business group, said: “We look forward to having the Unium team join us. The home networking market is booming and whole-home Wi-Fi is a key enabler for this. Today’s Wi-Fi solutions still have serious issues with sticky clients, interference, coverage gaps and capacity issues. With Unium inside, our Nokia Wi-Fi solution will deliver an unmatched user experience, going beyond what standard mesh Wi-Fi solutions deliver today.”

Martha Bejar, CEO at Unium added: “Nokia is a global leader in creating customer-centric solutions and is at the heart of our connected world. The Unium team is excited to join Nokia and drive a unique and innovative customer experience through our intelligent Wi-Fi solution, making every customer-touch better.”

A demo of Unium software as part of Nokia’s whole-home Wi-Fi demo will be shown at Mobile World Congress 2018.

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Announcements

Idea Raises Rs 3250 Crore Through Preferential Shares

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Idea Cellular on Monday said it has raised Rs 3250 crore by allotting preferential shares to its promoters the Aditya Birla Group. The raised capital will be used to repay debt.

In early January this year Idea had announced that the company is planning to raise a total of Rs 6750 crore – Rs 3250 from allocating preferential shares and Rs 3500 crore from further Preferential Issue, Qualified Institutional Placement (QIP) or Rights Issue. The same was approved by  Idea’s shareholders in the Extraordinary General
Meeting held on 30th January, 2018 resulting to this allotment of shares.

The company issued 326.6 million shares in this manner at a price of Rs 99.50 per share to promoters including Birla TMT Holdings Private Limited / Elaine Investments Pte. Ltd. (Singapore) / Oriana Investments Pte. Ltd. (Singapore) / Surya Kiran Investments Pte. Ltd. (Singapore).

Post this preferential allotment, the share holding of the promoter group in Idea rose to 47.2% from 42.4%.

“This equity infusion reiterates the Group’s commitment towards the telecom business and confidence in its growth prospects. Idea is in the process of bringing a world class 4G network to villages, towns and cities across India that will contribute to the transition of the Indian populace towards a digital lifestyle. With the planned fund raise combined with the recently announced sale of Idea’s towers and potential monetization of the Indus stake, the Company will be better capitalized to participate in the growth opportunities offered by the sector,” said Kumar Mangalam Birla, Chairman, Aditya Birla Group.

The equity infusion by the Promoter Group of Rs. 3,250 Crore, along with the proposed further capital raise of up to Rs. 3,500 Crore, will reduce Idea’s net-debt and as a result Vodafone’s net-debt contribution to the merged entity will also be reduced by an equivalent amount.

Additionally, the recently announced sale of Idea’s and Vodafone India’s standalone towers to American Tower Corporation for an aggregate enterprise value of Rs. 7,850 Crore and the potential monetization of Idea’s 11.15% stake in Indus Towers, will further augment the long term capital resources of the Company.

“These proceeds will significantly strengthen the balance sheet of the merged entity (Idea and Vodafone India) creating a resilient entity for the future,” said the company in a statement.

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M&ANews

Qualcomm Again Rejects Broadcom’s $150 Bn Acquisition Offer

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As expected, Qualcomm on Thursday rejected the revised offer from Broadcom to acquire the Paul Jacobs led technology firm for $150 billion, saying the proposal is still undervalued.

“Qualcomm’s Board of Directors has unanimously rejected the revised non-binding, unsolicited proposal by Broadcom Limited to acquire all of the outstanding shares of Qualcomm for $82.00 per share ($60.00 in cash and $22.00 in Broadcom stock), which Broadcom announced on February 5, 2018,” the firm said in a statement.

Broadcom on February 5 had sent a revised offer to the San Diego based chipmaker with $82 per share valuation after its first offer of $70 per share was rejected in November 2017. In the new offer Broadcom, besides a raised valuation, had also invited Qualcomm Chairman Paul Jacobs to join the board of the new entity.

The Qualcomm Board, assisted by its financial and legal advisors, determined that the Broadcom proposal materially undervalues the chipmaker and falls well short of the firm regulatory commitment the Board would demand given the significant downside risk of a failed transaction.

Though Qualcomm has rejected the fresh offer there are chances the acquisition talk would still go on as the company has offered to meet Broadcom members to discuss on the same.

“The Board has unanimously determined that your amended offer materially undervalues Qualcomm and falls well short of the firm regulatory commitment the Board would demand given the significant downside risk of a failed transaction. However, the Board is committed to exploring all options for maximizing shareholder value, and so we would be prepared to meet with you to allow you to explain how you would attempt to bridge these gaps in both value and deal certainty and to better understand the significant issues that remain unaddressed in your proposal,” Qualcomm Chairman Paul Jacobs wrote in a letter.

In the letter addressed to Broadcom CEO Hock Tan, Jacobs wrote that his company will reach out to the former to schedule a metting.

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