UK’s Vodafone Group Plc said Wednesday that it has sold an 18% stake — out of its 21.05% holding — in Indus Towers for Rs 15,300 crore via an accelerated book-building offering.
The stake sale proceeds will be used to clear bulk of the UK company’s existing lender dues relating to €1.8 billion of borrowings secured against its Indian assets.
“Vodafone Group Plc announces it has sold 484.7 million shares in Indus Towers, representing 18% of Indus’ share capital through an accelerated book-build offering. The placing raised Rs 15,300 crore (€1.7 billion) in gross proceeds, which will be used to substantially repay Vodafone’s existing lenders in relation to the outstanding bank borrowings of €1.8 billion secured against Vodafone’s Indian assets,” the British telecom carrier said in an official statement Wednesday.
Following the stake sale, Vodafone now holds 82.5 million shares in Indus, or a 3.1% stake, the British telco added.
According to a JP Morgan research note, as per a security package agreed upon during the merger of erstwhile Bharti Infratel and Indus Towers, Vodafone Plc’s 21.05% stake in Indus was the primary pledge by its lenders against the initial $1.4 billion loan Vodafone had taken in back 2019 to participate in its Indian telecom JV, Vodafone Idea’s rights issue. “If this share sale goes through, then the proceeds would be first used to repay Vodafone UK’s lenders,” J P Morgan had said.
Indus Towers has a secondary pledge on this Vodafone UK stake with a maximum liability of Rs 4250 crore. It remains to be seen if Vodafone UK uses any residual proceeds from the current stake sale to clear a portion of Vodafone Idea’s old dues to Indus.
In a related development, Bharti Airtel on Wednesday acquired an additional 1% stake in Indus for an undisclosed sum via an all-cash block deal, boosting its stake in the telecom tower company to 48.95% and inching closer to having a majority ownership.
The Sunil Mittal-led telco had said that following approval from its `Special Committee of Directors for evaluation of stake in Subsidiaries and Joint Ventures’, Airtel had acquired 26.95 million (i.e. 1%) equity shares of Indus today on-market in an all-cash deal.
Shares of Indus were down 2.81% at Rs 334.25 in Wednesday afternoon trade on the BSE, while Airtel shares were trading 1.4% lower at Rs 1408.90 on the exchange.
