KUALA LUMPUR (Sept 1): Axiata Group Bhd has secured an approval from Bangladesh’s High Court to merge Robi Axiata Ltd with another operator there, Airtel Bangladesh Ltd, an indirect wholly-owned subsidiary of Indian-based Bharti Airtel Ltd, paving the way for the setting up of the second largest mobile operator in terms of subscribers in Bangladesh.

In a filing with Bursa Malaysia today, Axiata said the High Court Division of the Supreme Court of Bangladesh has approved the amalgamation of the two entities with a merger fee of Taka 100 crore (US$12.8 million), along with a spectrum fee of Taka 507 crore (US$65 million).

Robi will be the surviving entity, which will be paying the fees which amount to US$77.8 million, to the Bangladesh Telecommunications Regulatory Commission (BTRC).

“The BTRC shall determine the mechanism of payment of these fees, including the possibility of installment payment,” Axiata said.

In the event Robi decides to return any spectrum to the BTRC, Axiata said the value of the returned spectrum has been fixed at Taka 10 crore (US$1.3 million) per MHz each year.

“BTRC, in consultation with Robi, shall ultimately decide the issue of return of spectrum, after considering the interference, quality of service and the necessity of the spectrum for providing the service,” Axiata said.

Axiata expects to complete the merger in the fourth quarter of 2016.

Upon completion, Axiata will hold a 68.7% controlling stake in the combined entity, while Bharti will hold 25%. The remaining 6.3% will be held by the existing Japanese shareholder, NTT Docomo Inc.

Currently, Axiata has a 91.59% stake in Robi and NTT Docomo 8.41%.

To recap, the merger talk of Robi and Airtel Bangladesh began on Jan 28 this year, but the negotiation met with a stumbling block in May, as the local government announced it wanted to impose a merger fee of US$92 million on the deal.

Speaking to reporters after Axiata’s annual general meeting in May this year, president and group chief executive officer Tan Seri Jamaludin Ibrahim had said that the group was trying to do away with the merger fee.

“We are working with the [Bangladeshi] government. [If the merger fee goes] beyond [a] certain amount, we will not proceed. We have a threshold. [If] based on the earlier asking price of US$92 million (RM377.20 million), we will cancel the merger, but we want to work in good faith with the government. The deal is still very good.

“What we are trying to do is to eliminate the merger fee, because then everybody will gain from this merger,” he added.

Axiata fell seven sen or 1.28% to RM5.42 today, giving it a market capitalisation of RM48.38 billion.