VI (Vodafone Idea) Sells Indus Towers stake for $506 Million

As part of efforts to shore up its troubled finances, Vodafone Concept Ltd., the debt-strapped Indian wireless carrier, sold its interest in a telecommunication tower company for 37.6 billion rupees ($506 million).

Vodafone Group Plc’s local branch disposed of the 11.15 percent stakes in Indus Towers Ltd. to current owners, the firm said in a late Thursday filing. After the contract, Bharti Infratel Ltd. will hold 36.7% of Indus Towers, 28.1% of British operator Vodafone, and the remainder owned by investors including KKR & Co. and the Investment Board of Canada Pension Scheme.

Vodafone Concept will not obtain all that cash, though. It owes the tower operator 24 billion rupees, which according to the statement, would be excluded from the overall consideration.

After racking up more than $15 billion in net debt, Vodafone’s local company, created by the combination of its Indian operations and billionaire Kumar Mangalam Birla’s Idea Cellular Ltd., has found ways to collect funds. Ever since the deal was announced in 2017, it has not registered an annual profit. Last December, in the absence of any relief, Birla warned of a failure after the nation’s top court directed it to pay the government billions of dollars in back payments for spectrum and other costs.

Vodafone Concept said in September it intended to collect as much as 250 billion rupees to sell shares and debt. The sector has been suffering in the face of competition from larger players such as Bharti Airtel Ltd. and Reliance Jio Infocomm Ltd. of billionaire Mukesh Ambani, which launched with free calls and inexpensive data in 2016 and escalated a market war.

Among Indian wireless carriers, Vodafone Concept was the financially weakest. When the Supreme Court allowed operators to stagger the payment of back payments over 10 years, it won partial relief in September.

Vodafone Concept shares soared in Mumbai as much as 4.9 percent Friday, extending the rally of the year to 57 percent. Bharti Infratel rose by as much as 15% .

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