So far the operator has raised about €5.4 billion from the creation and sale of stakes in its European tower estate
Vodafone Group continues to reduced its holding in Vantage Towers, announcing that it has received another €500 million from a consortium of infrastructure investors.
Vodafone’s holding in Vantage is complicated. The group spun off its European tower estate as Vantage Towers in 2020, primarily to raise money from passive assets that are seen as costs on a telco’s balance sheet. It needed capital to reduced debt and fund 5G and fibre deployment in various markets.
It floated Vantage on the Frankfurt Stock Exchange, with the initial public offering of 18% of the equity raised close to €2.6 billion in March 2022 – rather less than the previously touted upper limit of €4 billion.
Selling to private equity
At the end of 2022, Vodafone sold part of its 82% stake to a consortium of investment firms KKR & Co., Global Infrastructure Partners (GIP,) and The Public Investment Fund of Saudi Arabia (PIF). Vodafone announced its plans to set up a joint venture with the consortium, named Oak Holdings, to buy-out the minority shareholders. It now owns 89% of Vantage Towers.
The latest deal reduces Vodafone’s ownership in Oak Holdings from 64% to 60%; the consortium increases its stake to 40 and Vodafone receives €500 million. This increases the total sum it has raised by creating and selling stakes in Vantage to €5.4 billion.
More to come
Further deals look likely, as the agreement makes provision for the consortium to up its stake in Oak Holdings as much as 50% by the end of this year. If the consortium does take full advantage of this provision, Vodafone will have the option during 2024 of reducing its 60% stake to 50%.
Vantage owns and operates some 84,600 towers in ten European markets. No doubt the funds will be gratefully received: Vodafone’s shareholders are far from happy as the Group’s shares continue to languish and its revenues stall.