NEW DELHI: Vodafone, the parent company of Vodafone Idea Limited, announced on Wednesday that it will sell 3% stake in Indus Towers to clear its debt of $101 million (about Rs 856 crore).
The residual amount will be used to pay outstanding dues of its Indian venture, Vodafone Idea.
Following this transaction, Vodafone’s stake in Indus Towers will fall below 1%. Prior to this, Vodafone held 82.5 million shares, representing a 3.1% stake in Indus Towers.
In June, Vodafone sold an 18% stake in Indus Towers for nearly Rs 15,300 crore. The current transaction is valued at around Rs 2,841 crore, based on the closing price of Indus Towers stock at Rs 358.75 per share on the BSE.
Vodafone, in a regulatory filing said that the proceeds from the sale will be used to repay outstanding borrowings of $101 million to its existing lenders, secured against Vodafone’s Indian assets.
Under the terms of the security arrangements between Vodafone and Indus, Indus has a security over the residual proceeds from the sale to guarantee obligations from Vodafone Idea to Indus under the Master Services Agreements (MSA).
Vodafone intends to contribute the residual proceeds from the sale towards a new equity share issue by Vodafone Idea, once the terms of the capital raise have been evaluated and decided upon by the Board of Directors of Vodafone Idea. The shares of Vodafone Idea closed nearly 5% up after the parent company announced the stake sale to pare debt of VIL.