AZB advises Bharti Airtel on $14m HCIL merger of VSAT operations

On Tuesday, Telecom Operator Bharti AirtelNSE -1.65 % and Hughes Communications India Ltd (HCIL) announced they will combine their VSAT (Very Small Aperture Terminal) satellite operations in the country.

HCIL is a subsidiary of broadband satellite networks and services provider Hughes Network Systems.

Hughes will have majority ownership in the combined entity while Airtel will have a significant shareholding, according to a statement.

The statement didn't spell out the financial details of the transaction, which is subject to requisite approvals.

"The combined entity will benefit from enhanced scale, improved operational efficiencies and wider market reach. The combined entity will be well-positioned to leverage the demand for secure connectivity in a rapidly growing digital economy," it said.

VSAT is used to provide satellite-based telecom and internet access to individuals and enterprise user CLI is a broadband satellite service operator in India and offers a range of broadband networking technologies, solutions, and services for businesses and governments.

"The combined entity will continue to serve existing Hughes and Airtel customers," the statement added.

Commenting on the development, Partho Banerjee, President, and Managing Director, Hughes Communications India Ltd said these are exciting times for satellite broadband service providers as VSAT becomes mainstream, driven by growing demand from enterprise and government segments.

"We are very excited about the synergies that this partnership will bring to the Indian ecosystem," Banerjee said.

Ajay Chitkara, Director and CEO, Airtel Business said the partnership will bring synergies to the forefront and combine the capabilities of both the companies.

"Customers can look forward to highly secure and reliable connectivity solutions across the length and breadth of India," he said.

Post the scheme of arrangement becoming effective, Hughes Communications India Limited and HCIL Comtel (or their affiliates) will have majority ownership and Bharti Airtel Limited will have a significant shareholding in the resulting combined entity.

AZB & Partners advised Bharti Airtel Limited and Bharti Airtel Services Limited led by a team of Partners Vinati Kastia, Abhishek Shinde and Bharat Apte, and Senior Associate Harsh Kabra and Associate Shantanu Tiwari.

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