Airtel to acquire Vodafone's 4.7 per cent stake in Indus Towers if funds are used for VIL

In addition, Airtel is also protected with a capped price which is lower than the price for the block of Indus shares sold by Vodafone on February 24, 2022.

Published: 25th February 2022 05:26 PM  |   Last Updated: 26th February 2022 07:44 AM   |  A+A-

Bharti Airtel

Bharti Airtel (File Photo| Reuters)

By Express News Service

NEW DELHI: Telecom operator Bharti Airtel on Friday informed that it has entered into an agreement with Vodafone to buy 4.7% equity interest in Indus Towers. The principal condition of the deal is that the amount paid shall be inducted by Vodafone as fresh equity in Vodafone Idea Limited (VIL) and simultaneously remitted to Indus Towers to clear VIL’s outstanding dues.

“The acquisition purchase would be at an attractive price representing a significant discount typically available for such large block transactions. In addition, Airtel is also protected with a capped price that is lower than the price for the block of Indus shares sold by Vodafone on February 24, 2022. This shall be value accretive to Airtel and protect its existing significant shareholding in Indus Towers,” said Airtel in a statement.

The cash-strapped Vodafone Idea (VIL) has been unable to pay dues of Indus Towers, and both VIL and promoter Vodafone has proposed a payment plan to clear the outstanding amount by July 15. In the meantime, as per reports, VIL has committed to pay certain minimum amount each month to Indus Towers.

“We believe this transaction allows Airtel to secure continued strong provision of services from Indus Towers, protects and enhances Airtel’s value in Indus Towers, enables it to receive rich dividends and also paves the way for subsequent financial consolidation of Indus Towers in Airtel,” said Airtel. 

Indus Towers is a provider of passive telecom infrastructure and it deploys, owns and manages telecom towers and communication structures for various mobile operators. Currently, Vodafone holds about 28% in Indus Towers while Bharti Airtel holds around 42%.

The company’s portfolio of over 1,84,748 telecom towers makes it one of the largest tower infrastructure providers in the country. Recently, Vodafone Idea Ltd opted to pay interest of around Rs 16,000 crore through preferential shares, which makes the government a 35.8% stakeholder in the company. 



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