Vodafone sells $1.83 billion stake in Indus Towers to repay debt

Vodafone’s Indus Tower stake: Vodafone Group sold a larger-than-expected 18 per cent stake in Indus Towers for $1.82 billion on Wednesday, with local telecom operator Bharti Airtel purchasing shares to increase its stake to nearly 50 per cent.

The UK-based Vodafone, which initially planned to sell a 10 per cent stake in the mobile tower operator, expanded the sale due to strong investor demand, according to a banking source familiar with the transaction who requested anonymity.

Vodafone sold 484.7 million Indus shares at a price range of 310-341 rupees per share, raising 153 billion rupees, or 1.7 billion euros, in gross proceeds. The funds will be used to repay debt.

Vodafone has bank borrowings of 1.8 billion euros secured against its Indian assets, which include a stake in Vodafone Idea, the country’s third-largest telecom operator by subscribers.

Indus Towers' stock dropped as much as 9.4 per cent before reducing losses to trade down 4.3 per cent at 329.60 rupees around midday in Mumbai, with over 750 million shares traded, marking its busiest-ever session.

Airtel, the second-largest telecom operator in the country, stated it acquired approximately a 1 per cent stake in Indus, raising its total stake to around 49 per cent, but did not disclose the purchase price.

Following the sale, Vodafone Group retains a 3.1 per cent stake in Indus. Vodafone Idea also holds a stake in Indus. Private equity firm KKR and Canadian fund CPPIB sold their entire stakes in Indus in February.

Vodafone Group executed the sale through block deals, a method increasingly popular in India with the stock market reaching record highs.

Shares of Vodafone Idea remained mostly flat, while Bharti Airtel's shares fell by 1 per cent.

(With Reuters inputs)