NEW DELHI: Telecom giant Vodafone Group is all set to sell about 10% stake in Indus Towers for as much as $1.1 billion on Wednesday as a part of its efforts to repay debt.
Vodafone will sell 268 million shares in Indus Towers via block deals at a price range of Rs 310 to Rs 341 per share (a discount of up 10% from Tuesday’s closing price), valuing the stake between $996 million and $1.1 billion. Shares of Indus Towers closed on June 18 at Rs 346.45, up 1.67% on the NSE.
Last week it was reported that UK-based Vodafone was mulling to sell its entire $2.3 billion stake in Indus Towers via block deals. Vodafone currently owns 21.5% in Indus Tower via different entities. The stake sale comes months after Bharti Airtel denied reports that it was in talks to buy Vodafone’s stake in Indus Towers. Airtel is Indus Towers’ biggest shareholder, with 47.95% stake. Vodafone has hired Bank of America, Morgan Stanley, Jefferies and BNP Paribas to manage the deal.
It has plans to repay part of its $42.17 billion net debt using proceeds from Indus stake sale. The company in 2022 had announced it would be offloading its 28% stake but has managed to sell only a small portion so far.
Brokerage JP Morgan in a note on Tuesday said Vodafone Group’s probable stake sale in the company could drive cashflows of $2.3 billion which could see accelerated repayment to vendors like Indus Tower and even drive a special dividend to the shareholders of the Indian tower company.
“As per the security package agreed upon during merger of erstwhile Bharti Infratel and Indus Towers, Vodafone’s 21% stake in Indus was the primary pledge by its lenders against $1.4 billion loan Vodafone Plc taken in 2019 to participate in Idea’s rights issue while Indus Towers had a secondary pledge with a maximum liability of Rs 42.5 billion,” said JP Morgan.
Plans to repay part of $42.17 billion net debt
Vodafone Group has plans to repay part of its $42.17 billion net debt using proceeds from Indus stake sale. The company in 2022 had announced it would be offloading its 28% stake but has managed to sell only a small portion so far.