UK's Vodafone Group to sell remaining 3% stake in India's Indus Towers

British telecom company Vodafone will sell 3 per cent stake in Indus Towers to clear its debt of $101 million or about Rs 856 crore and use the residual amount to pay outstanding dues of its Indian venture Vodafone Idea.

 

The transaction is valued at around Rs 2,841 crore as per the Wednesday's closing price of Indus Towers stock at Rs 358.75 apiece on the BSE.

 

"Vodafone Group Plc announces that it has launched a placing of its remaining 79.2 million shares in Indus Towers Limited representing 3 per cent of Indus' outstanding share capital through an accelerated book build offering," Vodafone said in a regulatory filing.

 

Post this, Vodafone's stake in Indus Towers will fall below 1 per cent. Before this transaction Vodafone had 82.5 million shares or 3.1 per cent stake in Indus Towers.

 

In June, Vodafone had sold an 18 per cent stake in Indus Towers for about Rs 15,300 crore.

 

"The proceeds from the Placing will be used firstly to repay Vodafone's outstanding borrowings of $ 101 million to Vodafone's existing lenders, secured against Vodafone's Indian assets," the British telecom firm said.

 

Under the terms of the security arrangements between Vodafone and Indus, Indus has a security over the residual proceeds from a placing to guarantee obligations from Vodafone Idea to Indus under the Master Services Agreements (MSA).

 

"...Vodafone intends to contribute the residual proceeds from the placing (after repayment of Vodafone's outstanding borrowings) towards an issue of new 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.

 

"The proceeds from the capital raise would be used by Vi to pay outstanding MSA dues to Indus," the filing said.

 

The remaining stake of Vodafone in Indus Towers will be available to the telecom tower firms to guarantee Vi's obligations under the MSA.

   

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