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Vodafone Idea sells Indus Towers stake for US$506m
[NEW DELHI] Vodafone Idea, the debt-strapped Indian wireless carrier, sold its stake in a telecommunications tower firm for US$506 million, as part of efforts to shore up its strained finances.
The local arm of Vodafone Group disposed of the 11.15 per cent holdings in Indus Towers to existing shareholders, the company said in a filing late Thursday. After the transaction, Bharti Infratel will own 36.7 per cent of Indus Towers, British operator Vodafone 28.1 per cent, with the rest held by investors including KKR and Canada Pension Plan Investment Board.
However, Vodafone Idea won't receive all that cash. It owes the tower operator 24 billion rupees (S$434.8 million), which will be deducted from the total consideration, according to the statement.
The local venture of Vodafone, formed by the merger of its Indian operations and billionaire Kumar Mangalam Birla's Idea Cellular has been seeking ways to raise cash after racking up more than US$15 billion in net debt. It hasn't reported an annual profit since the merger was announced in 2017. Last December, Mr Birla warned of a collapse in the absence of any relief after the nation's top court ordered it to pay billions of dollars in back fees to the government for spectrum and other charges.
In September, Vodafone Idea said it was planning to raise as much as 250 billion rupees selling shares and debt. The company has been struggling in the face of competition from bigger rivals such as Bharti Airtel and billionaire Mukesh Ambani's Reliance Jio Infocomm, which debuted in 2016 with free calls and cheap data and intensified a price war.
Vodafone Idea has been the weakest financially among Indian wireless carriers. It won partial relief in September when the Supreme Court allowed operators to stagger the payment of back fees over 10 years.