LONDON - Vodafone Group (LON:VOD) Plc has initiated the sale of a 3.0% stake in Indus Towers Limited, comprising 79.2 million shares, through an accelerated book build offering. The move comes as the telecom giant looks to repay approximately $101 million in outstanding borrowings secured against its Indian assets. The sale is part of a broader financial strategy involving Vodafone (NASDAQ:VOD)'s relationship with both Indus Towers and Vodafone Idea Limited (Vi).
The proceeds from the share sale will primarily serve to settle Vodafone's debts to its lenders. Following this repayment, any leftover funds are intended to support a potential equity share issue by Vi, as determined by Vi's Board of Directors. These additional funds would enable Vi to clear outstanding dues under Master Services Agreements (MSAs) with Indus.
As per the security arrangements between Vodafone and Indus, the latter holds security over the remaining proceeds from the share sale. This measure ensures the guarantee of Vi's obligations to Indus under the MSAs. Should there be any remaining shares after Vodafone's loan repayment, these shares and any unutilized proceeds that Vodafone does not invest in Vi's new shares will be available to Indus as a guarantee for Vi's MSA obligations.
The entities participating in the sale are Omega Telecom (BCBA:TECO2m) Holdings Private Limited and Usha Martin (NS:USBL) Telematics Limited. Vodafone has clarified that while these borrowings are reflected in its reported borrowings, they are not included in its net debt calculations.
Vodafone has stated that further announcements will be made when appropriate, indicating that additional details on the transaction's progress and its impact on Vodafone's financial position will be provided in due course. This development is based on a press release statement from Vodafone Group Plc.
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