Vodafone to sell down shareholding in Indus Towers

Vodafone announced the sale of a partial stake in Indus Towers on Wednesday, launching a placing of 63.6 million Indus shares, or 2.4% of Indus' outstanding share capital.

The FTSE 100 telecoms giant said it was also in “advanced discussions” with one of the largest shareholders in Indus for the purchase of up to 127.1 million Indus shares from Vodafone, or 4.7% of Indus' share capital.

Should the sale be completed, Vodafone would retain 567.2 million shares in Indus, or a 21% shareholding.

In addition, Vodafone said it was also in discussions with “several interested parties” over a potential sale of that residual shareholding.

“A further announcement will be made as soon as practicable if any further agreements are reached,” the company’s board said in its statement.

Vodafone Group holds 757.8 million shares in Indus Towers, equivalent to a 28.1% shareholding, with 190.7 million of those currently pledged to Indus as part of the security arrangements entered into between Vodafone and Indus at the merger of Indus Towers with Bharti Infratel.

“Vodafone and the Aditya Birla Group (ABG), the promoters of Vodafone Idea (Vi), are committed to support Vi in its efforts to strengthen its balance sheet,” Vodafone said.

“The first step in this process included the conversion of $2.1bn of AGR and spectrum interest into equity, which will make the Indian Government the largest shareholder of Vi.

“Vodafone and ABG intend to contribute towards an issue of equity shares by Vi once the terms of such a Capital Raise have been evaluated and decided on by the board of directors of Vi.”

Vodafone and Indus had modified their security agreements to allow Vodafone to dispose of the pledged primary shares, and use the proceeds to participate in an issue of new shares by Vi, the firm explained.

“The modified terms will continue to provide security to Indus for an equivalent amount of payments by Vi under the master services agreements.

“Any residual proceeds from the sale of the primary shares that are not used by Vodafone to subscribe for new shares in Vi will be available to Indus until 19 November to guarantee Vi's obligations under the master services agreements.”

At 1154 GMT, shares in Vodafone Group were up 0.22% at 136.72p.