UK's Vodafone Group Plc (Vodafone) announced on Wednesday, December 4, that it plans to sell its remaining 3 percent stake in Indus Towers. In a statement, the company said it has launched a placing of its remaining 79.2 million shares in Indus Towers Limited (Indus), representing 3 percent of Indus's total share capital, through an accelerated book-building offering. This divestment of shares marks Vodafone's complete exit from the telecom infrastructure company, Indus.
Also Read: Vodafone Executives Step Down from Indus Towers Board After Bharti Airtel’s Majority Ownership
Proceeds to Repay Vodafone's Borrowings
Vodafone Group stated that the proceeds from the placing will first be used to repay Vodafone's outstanding borrowings of approximately USD 101 million to its existing lenders, secured against its Indian assets.
This move follows the resignation of executives from the UK's Vodafone Group PLC, who served as non-executive directors on the board of Indus Towers, after Bharti Airtel increased its stake to over 50 percent in the tower company. Following the buyback exercise, Airtel's shareholding in Indus Towers—a joint venture company—rose to approximately 50.005 percent, making Indus Towers a subsidiary of Bharti Airtel.
Indus Towers' Arrangement with Vodafone
Under the terms of the security arrangements between Vodafone and Indus, Indus has security over the residual proceeds from the placing to guarantee obligations from Vodafone Idea Limited (Vi) to Indus under the Master Services Agreements (MSAs).
Vodafone plans to allocate the residual proceeds, after repaying the borrowings, towards a potential capital raise by Vi, once its board evaluates the terms. The funds from this capital raise will help Vi settle its MSA dues to Indus.
Following the repayment of Vodafone's outstanding borrowings, if any Indus shares remain, those shares and any proceeds not used by Vodafone to subscribe to new shares in Vi would be available to Indus to guarantee Vi's obligations under the MSAs. Vodafone stated that a further announcement will be made if necessary.
Also Read: Bharti Airtel Gets CCI Approval to Raise Indus Tower Stake Over 50 Percent
Vodafone's Phased Exit from Indus Towers
The sale completes Vodafone's phased divestment in Indus Towers. In June 2024, Vodafone sold an 18 percent stake in Indus Towers for Rs 15,300 crore, reducing its holding to 3 percent.
