UK’s Vodafone to sell remaining 3% stake in Indus Towers

British telecom company Vodafone Plc on Wednesday announced its plan to sell its remaining 3% stake, or 79.2 million shares, in Indian tower firm Indus Towers Ltd.

The telecom firm plans to use the funds from the stake sale towards repayment of about $101 million in outstanding dues to existing lenders, secured against Vodafone’s Indian assets.

Any residual proceeds from the share sale will be intended for Vodafone Idea Ltd’s outstanding master services agreement (MSA) dues to Indus Towers, the company said.

A further announcement will be made when appropriate, it added.

In June, Vodafone had offloaded an 18% stake in Indus Towers for Rs15,300 crore (about $2 billion), bringing its shareholding down to 3%, held through two units – Omega Telecom Holdings Pvt. Ltd and Usha Martin Telematics Ltd.

The stake sale was part of efforts by Vodafone chief executive Margherita Della Valle, who took charge last year, to cut the telecom firm’s exposure to underperforming markets.

The gross proceeds will be tapped to repay Vodafone’s existing lenders in relation to the outstanding bank borrowings of €1.8 billion secured against Vodafone’s Indian assets, the company had then said.

The stake sale was also among the biggest in India this year after British American Tobacco (BAT), the biggest shareholder in ITC Ltd, sold a 3.5% stake in the Indian conglomerate in March for about ₹17,500 crore (about $2.1 billion).

Vodafone will be completing its exit from Indus Towers through a $320 million (about Rs2,700 crore) block trade at a price of Rs343-358 per share, CNBC-Awaaz reported on Wednesday, citing people aware of the developments.

Kotak and BofA are learnt to be the brokers for the share sale by the two Vodafone units, Omega and Usha Martin. Bharti Airtel Ltd, the other promoter entity, holds about 50% stake in the company.

Bharti Airtel Ltd had told the exchanges in June that it bought about 26.95 million shares, or a 1% stake, in Indus from Vodafone. Airtel held a 47.95% stake in Indus before this transaction.

Shares of Indus Towers rose about 1.5% on Wednesday to Rs358.75 at close, while those of Vodafone India Ltd rose 2.4% to Rs8.41.