Vodafone currently owns 21.5% of Indus Towers via various group entities
U.K.-based Vodafone Group is looking to sell its entire $2.3 billion stake in Indian tower company Indus Towers through stock market block deals, local newspaper Business Standard reported, citing sources with knowledge of the matter.
According to the report, the move is part of Vodafone’s effort to repay debt.
Vodafone currently owns 21.5% of Indus Towers via various group entities. In early 2022, Vodafone sold 7.1% of its holdings in the tower firm.
Vodafone has hired Bank of America, Morgan Stanley and BNP Paribas to manage the stake sale, according to the report.
The sources added that Vodafone plans to repay part of its $42.17 billion net debt using proceeds from the sale of its stake in Indus Towers.
Indian operator Bharti Airtel is also a large shareholder in Indus Towers, which currently has nearly 220,000 towers across India.
Private equity company KKR and Canadian fund CPPIB were also investors in Indus, but sold their entire stakes in February this year.
Vodafone’s local unit in India, Vodafone Idea, has fallen behind in monthly payments for use of the towers owned by Indus by as much as INR100 billion ($1.2 billion). According to recent reports, Vodafone Idea accounts for about 40% of Indus Tower’s revenue.
Last week, Bharti Airte’sl Chairman Sunil Mittal urged Vodafone Idea to settle its debts with Indus Towers and said that the tower firm would not provide new services to the telco if it failed to pay.
Mittal warned that Vodafone Idea won’t be able to use Indus’ 5G towers unless the payments are made.
Vodafone Idea recently concluded its $2.16 billion follow-on public offer (FPO) and also raised about $648.5 million from 74 anchor investors. Vodafone Idea recently said it expects to use the equity and debt funding to deploy its 5G service across India within six to seven months of securing the funds; it was also seeking funds to bolster its 4G network and pay tower vendors.
Vodafone Idea’s chief executive Akshaya Moondra recently told local newspaper The Economic Times the telco would not use the proceeds of its FPO to pay debts with vendors.
“FPO proceeds will not be utilized to pay any promoter or promoter group entity. As such, only a maximum of around 17% of the FPO proceeds are for general corporate purposes. We will use it in the best interest of the business and that use could also be capex. Broadly, we hope to pay vendors with the cash flows that we generate from operations, over a period of time,” Moondra said.
Swedish vendor Ericsson recently confirmed that it was in discussions with Vodafone Idea with the aim of securing new orders for 4G and 5G equipment. Recent reports stated that Vodafone Idea was also having talks with Finnish vendor Nokia.
