Vodafone Group looks to sell up to 3% stake in Indus Towers

Vodafone Group Plc is looking to sell up to 3 per cent stake in Indian telecom infrastructure company Indus Towers, which has seen its shares run up over 70 per cent over the last one year. The deal size is likely to be a little over ₹2,000 crore, sources said.

The UK telecom operator owns, through indirect wholly-owned subsidiaries, a little over 21 per cent in Indus Towers. At today’s closing price of around ₹270.7 a share, Vodafone Group’s entire stake would be worth ₹15,348 crore ($1.8 billion). The shares are pledged, and Axis Trustee Services holds them as the security trustee, according to the quarterly exchange filing for December.

Sources indicated that a sale would happen likely through a block trade either next week or early in the next fiscal year. A term sheet is being prepared that would be shortly circulated to potential buyers. Media reports last year had indicated that Bharti Airtel, which holds a majority 47.95 per cent stake may not be exercising its right of first refusal if Vodafone finds another buyer.

An email sent to Vodafone Plc seeking clarification on the deal did not elicit any reply.

Pledge on shares

The pledge on the shares would have to be lifted, however, before they can be sold. Vodafone can either release the shares by paying down the money or it can negotiate with the lenders to lift the lien so that they can be sold. According to reports a year ago, the British company had pledged its stake to settle outstanding dues.

In 2022 Vodafone Plc sold over 7 per cent stake in Indus Towers of which 4.7 per cent was acquired by Bharti Airtel. The proceeds of the stake sale was invested in its Indian unit, Vodafone Idea, which is currently grappling with a massive debt burden of over ₹2-lakh crore. The current sale can also be used to repay part of Vodafone Idea’s due to Indus Tower.

The entities through which Vodafone Group holds stake in Indus Towers are Asian Telecommunication Investments (Mauritius) (1.86 per cent), Prime Metals (4.16 per cent), Euro Pacific Securities (0.51 per cent), Trans Crystal (2.78 per cent), Al-Amin Investments (1.55 per cent), Mobilvest (3.19 per cent), Vodafone Telecommunications India (3.09 per cent),  CCII Mauritius Inc (0.85 per cent), Omega Telecom Holdings (2.3 per cent) and Usha Martin Telematics (0.75 per cent).

Shares of Indus Towers have been going up and over the last five days has gained 8.9 per cent, most of the gain coming today, the stock ending 8.2 per cent higher. On February 1, a KKR entity Silverview Portfolio Investments and Canada Pension Plan Investment Board sold 7 per cent stake in Indus Towers, virtually exiting the stock.

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