Vodafone Group Plc is set to sell almost 10% of its shares in Indus Towers through block deals, with a price band representing a 10% decrease from its Tuesday closing price. The transaction is expected to fetch an estimated amount between ₹8,308 Crore and ₹9,138 Crore. The proceeds from the sale are likely to be invested in Vodafone Idea, as the telecommunications company looks to reduce its net debt of $42.17 billion. This move is part of Vodafone's plans to divest its 28% stake in Indus Towers by 2022.
Vodafone to Sell Indus Towers Stake, Invest Proceeds in Vodafone Idea
Telecommunications giant Vodafone Group Plc is preparing to sell nearly 10% of its shares in Indus Towers, one of India's leading telecom tower companies. The sale, which is expected to raise between ₹8,308 Crore and ₹9,138 Crore, is part of Vodafone's broader strategy to reduce its global debt and invest in its Indian operations.
Background
Indus Towers was formed in 2007 as a joint venture between Bharti Airtel, Vodafone India, and Idea Cellular. The company operates over 154,000 telecom towers across India, making it one of the largest tower companies in the country. Vodafone currently owns a 28% stake in Indus Towers, making it the largest shareholder after Bharti Airtel (42%) and Idea Cellular (26%).
Rationale for the Sale
The sale of Indus Towers shares is part of Vodafone's ongoing efforts to reduce its global debt burden, which currently stands at $42.17 billion. The proceeds from the sale will be primarily invested in Vodafone Idea, the Indian telecom joint venture between Vodafone and Idea Cellular.
Vodafone Idea has been struggling financially in recent years, due to intense competition from rivals such as Reliance Jio and Airtel. The company is facing high debt levels and has been working to improve its financial performance. The investment from the Indus Towers sale is expected to help Vodafone Idea reduce its debt and invest in network expansion and 5G services.
Impact on Vodafone Idea
The investment from the Indus Towers sale is seen as a positive development for Vodafone Idea. The company has been struggling to compete with its rivals, and the additional funding will help it to improve its network and services. This is expected to lead to increased revenue and profitability for Vodafone Idea in the long term.
Top 5 FAQs
1. Why is Vodafone selling shares in Indus Towers? To reduce its global debt and invest in Vodafone Idea.
2. How much is Vodafone expected to raise from the sale? Between ₹8,308 Crore and ₹9,138 Crore.
3. Who are the other major shareholders in Indus Towers? Bharti Airtel (42%) and Idea Cellular (26%).
4. What is Vodafone's ultimate goal with the sale? To reduce its debt and improve the financial performance of Vodafone Idea.
5. How will the sale affect Vodafone Idea? The investment from the sale is expected to help Vodafone Idea reduce its debt, improve its network, and increase revenue and profitability.
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