The operator group will pay off some debt with the proceeds and retains a stake of more than 3.1% in the towerco
Earlier this week we reported that Vodafone Group was looking to offload a stake in Indus Towers to pay off debt. Although no details of the purchaser have been made public, it reportedly has sold 484.7 million shares in Indus Towers, India’s largest towerco, representing an 18% stake, for INR 153 billion (€1.7 billion) in gross proceeds.
Vodafone is to use the money to pay off some a substantial chunk of 1.8 billion in outstanding bank loans against Vodafone’s Indian assets. However, its net debt stands at INR2.2 trillion.
After the transaction, Vodafone will hold 82.5 million shares in Indus representing a stake of more than 3.1%.
Earlier this week Vodafone swapped equity in Vi with Ericsson and Nokia, the equipment providers, to pay off money owing to them.
Consolidation
Indus Towers was set up as a joint venture in 2007 between operators Bharti Airtel, Vodafone India and Idea Cellular. The latter two merged in 2018 and became Vodafone Idea, under the brand Vi, in an attempt to improve the parties’ fortunes in the face of the onslaught from Reliant Jio, a new operator, and ongoing struggles with the Indian authorities over hotly contested fees, taxes, penalties and interest the authorities insisted were owed to them.
The Indian government became the majority stakeholder in Vi in February 2023, exchanging equity in the company for some of the outstanding debt. Since the merger, the operator has lost almost 200 million customers. At the end of 2023, its mobile customer base was 215.2 million.
Vodafone has been selling off its Indus Towers stake since early 2022, under pressure from Indus Towers whose infrastructure it relies on and to whom it reportedly owes almost INR100bn. Vi accounts for about 40% of Indus’s revenue.
Margherita Della Valle, CEO of Vodafone Group, has said paying off debt and extricating the company from non-profitable markets is a key plan of her recovery strategy.