Tikona co-founder sues Airtel post acquisition of its 4G business

Bharti Airtel, which is all set to acquire Tikona Digital's 4G airwaves for Rs 1,600 crore, has faced a roadblock in the form of legal charges by one of Tikona’s cofounders Rajesh Tiwari.

Tiwari has slapped a legal notice against both Airtel and Tikona for not providing details of how the proceeds will be split among shareholders. He said that the deal should be put on hold until his entitlements and interests were protected.

Tiwari holds just over 1% in the Mumbai-based Internet services provider.

Airtel, which is already engaged in a fierce battle with Reliance Jio, also has another problem in the form of a united Vodafone-Idea entity, announced a few days earlier.

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The Airtel-Tikona deal includes taking on debt of Rs 500-600 crore, and will see Airtel net 100 MHz of 4G spectrum in the 2300 MHz (4G) band equally split across the five circles. The deal would also take its total 4G holding to close to 880 MHz (including Telenor India); however, it’d still be behind Jio (1,169 MHz) and Vodafone-Idea entity (1,089 MHz).

The deal would be closed in the coming four to six weeks, after which Airtel’s high-speed 4G services will be rolled out on the newly acquired spectrum.

Also read: Reliance Jio writes to ASCI against Ookla's network speed test of Airtel

Tikona was founded in 2008 by former Reliance Communications executives Rajesh Tiwari and Prakash Bajpai, and is backed by investors like Goldman Sachs, Oak Capital, IFC and Everstone Capital. Tiwari, even after having left the company in 2009, holds a direct 1% stake while also being a shareholder of Tikona Trust, which owns a stake in the company as well.

As per his conversation with ET, he took the legal action since he was not provided any information about the split of the share proceeds from the deal.

(Image source: International Business Times)