Bharti airtel shares fall down by nearly 3 percent on Wednesday when the company called off its deal to acquire the business and assets of Loop Mobile and its sister concern Loop Telecom. Loop Mobile, an Indian mobile network operator, was previously known BPL.
Stocks of the company fall down by 2.70 percent and ended the day at ₹ 385.30 on the BSE and at NSE it was it was down by 2.29 percent and ended at ₹ 386.70.
If we talk in terms of volume then also the company suffered a downside, as 4.77 lakhs shares of the company were traded at BSE, and over one crore shares changed hands at NSE.
The reason behind this downfall was that the Bharti Airtel called of its deal to acquire assets and business of a Mumbai based company Loop Mobile, for about Rs 700 crore, however, the Department of Telecom (DoT) has not cleared it yet.
“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The approval for the transaction is still awaited from the relevant authorities as a result of which Bharti Airtel has withdrawn from the proposed transaction causing huge loss to the company,” Loop Mobile spokesman said.
Even though the licence of the Loop Telecom expires on 29th November, the agreement between Bharti Airtel and Loop Mobile, that operates only in Mumbai circle, expires on October 31. Yet in the last few weeks DoT was taking several meetings and discussion, whether this deal should be given a green signal or not.
Bharti Airtel said: “Under the agreements executed with Loop Mobile, the transaction was conditional upon DoT approvals, which even as of today has not been received. In this regard we have been in discussions with Loop. Loop had late last evening sent us an email noting that DoT approvals had not yet been received and had also noted that it was way beyond the time envisaged for securing such approval.” Bharti airtel further added “In light of this update and the fact that Loop’s mobile license is to expire at the end of this month, we have decided to terminate the discussions with regard to the transaction for acquiring subscribers of Loop. A formal communication to this effect has been released to Loop at 05:19 PM today.”