Vodafone Plc has sold an 18% stake in the Indian telecom infra company Indus Towers. In a release, the telecom giant said that it raised Rs 153 billion or Rs 15,300 crore in gross proceeds from the stake sale. The company has confirmed that it will use the raised funds to reduce the debt that it secured against the Vodafone Idea (Vi) assets.
Vodafone said, "The Placing raised INR 153.0 billion (€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."
Read More - Vodafone Idea Must Pay Dues to Indus Towers to Get New Services: Report
Post the stake sale, Vodafone UK still has a 3.1% shareholding in Indus Towers. It is worth noting that Vodafone Idea (Vi) is the largest customer of Indus Towers, and owes quite a lot of money to the tower company. Indus Towers has been struggling to get the complete payment from Vodafone Idea due to the telco's poor cash flow situation. Vi has reported approximately Rs 1,90,000 crore in losses over the last five years.
Vodafone UK is not interested in its Indian business anymore. In fact, the company wrote off Vodafone Idea from its books and it is unlikely going to help Vi any more with respect to raising funds. Even with Indus Towers, being one of the largest stakeholders in the company, Vodafone UK has slowly sold a majority of its stake and may sell the remaining stake in the near future as well.
Read More - Indus Towers Hails Telecom Bill 2023 for Addressing Industry Concerns
Indus Towers is trading at Rs 329.55, 4.35% lower than its previous closing pricing at the time of writing this. The tower company has warned Vi that it has to clear all the past dues otherwise Indus Towers won't help Vi in rolling out new technologies such as 5G.
