Vodafone PLC to sell 3% stake in Indus Towers to repay Vi debt

UK-based telecom operator Vodafone PLC on Wednesday announced that it will sell its remaining 3% stake in Indus Towers to repay debt in Vodafone Idea (Vi).

"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," Vodafone said in a statement.

The telco said that it intends to contribute the residual proceeds from the sale 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.


"Following the repayment of Vodafone's outstanding borrowings, if any Indus Shares remain, such Indus Shares and any proceeds which are not used by Vodafone to subscribe to new shares in Vi would be available to Indus to guarantee Vi's obligations under the MSAs (Master Services Agreements)," Vodafone said.

At the end of the September quarter, Vodafone's Omega Telecom Holdings owned a 2.26% stake in Indus while Usha Martin Telematics owned another 0.74% stake.

Once the sale of these 7.92 crore, representing 3% equity, is completed, Vodafone will cease to be a shareholder in Indus.

Earlier in June this year, Vodafone had sold an 18% stake in Indus to raise Rs 15,300 crore in gross proceeds which was intended to 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.

In a separate statement, Indus Towers said that it has released the pledge on 3.003% of shares held by Vodafone promoters in the company today for the promoters to execute the sale of such shares.

Ahead of the announcement, Indus Towers shares ended 1.5% higher at Rs 358.75 on BSE.