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Vodafone Group intends to sell a 3% stake in Indus Towers, aiming to use the proceeds to settle a debt of USD 101 million
Vodafone Fundraise Plan
Vodafone Idea’s board, on December 9, approved the issuance of up to 176 crore shares on a preferential basis to raise Rs 1,980 crore. The shares will be issued at Rs 11.28 each, comprising a face value of Rs 10 and a premium of Rs 1.28 per share.
“A total of up to 1,755,319,148 equity shares will be issued for an aggregate consideration of Rs 1,980 crore,” the company stated in a stock exchange filing.
The preferential allotment includes Rs 1,280 crore worth of shares to Omega Telecom and Rs 700 crore to Usha Martin Telematics, both entities of the Vodafone Group.
The issue price reflects a nearly 40% premium, as Vodafone Idea’s shares closed flat at Rs 8.11 on December 9.
Meanwhile, Vodafone Group Plc, based in the UK, has sold its entire 3% stake in Indus Towers through a series of block deals with major global investment banks, alternative asset managers, large international fund houses, hedge funds, local mutual funds, and pension funds, raising approximately Rs 2,801.7 crore. This marks Vodafone’s complete exit from the Indian tower company, which is now a subsidiary of Bharti Airtel.
Vodafone Group holds a 22.56% stake in Vodafone Idea, while the Aditya Birla Group owns 14.76%, and the government holds 23.15%.
Vodafone Idea announced that after settling its debt, the remaining funds will be used for the issuance of new equity shares, with the specific terms of the capital raise to be decided by the Board.
The telecom company’s plan to raise Rs 2,000 crore through equity or convertible securities on a preferential basis aims to help settle its dues with Indus Towers. Analysts view this move as a potential catalyst for strengthening its negotiations with lenders for additional debt funding, providing crucial financial support to the company.
Vodafone Idea also indicated that tariff hikes are expected in the future, although there is limited scope for increasing entry-level tariffs. Instead, price increases will likely target higher consumption levels.
In November, it was reported that the government had approved the waiver of bank guarantees for telecom operators concerning spectrum purchased before 2022. This decision is seen as a relief for Vodafone Idea, which owes over Rs 24,700 crore in bank guarantees to the government.
