Vodafone Group Plc had pledged shares of Indus Towers with its bankers against investments towards funding the India operations, at the time of the merger between Vodafone India and Idea Cellular back in 2017, which amounted to about $2 billion, the people cited above said on condition of anonymity.
In a statement on Wednesday, the British carrier said, “The placing raised INR 153.0 billion (€1.7 billion) in gross proceeds which will be used to substantially repay Vodafone’s existing lenders in relation to the outstanding bank borrowings of €1.8 billion secured against Vodafone’s Indian assets.”
“From the money they’ve raised from the sale, bulk of it will go towards paying the bankers,” one of the people cited earlier said. “And if there’s anything left, it may be used towards indemnity towards adjusted gross revenue dues owed by Vodafone Idea.”
According to Vodafone Group’s 2023 annual report, the telco had €1.5 billion as outstanding bank borrowings from lenders secured against Indian assets, which includes Vodafone Idea.
The UK-based carrier’s total holdings in Indus Towers stands reduced to 3.1% from 21.5% after it sold 484.7 million shares through an accelerated book-build offering.
No benefit from FPO either
Vodafone Idea, a key customer of India’s largest telecom tower provider Indus Towers, raised ₹18,000 crore in India’s largest follow-on public offer (FPO) this April.
However, the telco’s chief executive Akshaya Moondra had said at the time that Vodafone Idea cannot use the proceeds to settle the dues of Indus Towers as the latter was a promoter company. Vodafone Idea owes an estimated ₹10,000 crore to Indus Towers.
Who bought, who sold shares in the block deal
According to data from National Stock Exchange (NSE), SBI Mutual Fund and Bharti Airtel are amongst the bigger buyers with the former buying over 35 million shares worth ₹1,117 crore.
Bharti Airtel, the largest shareholder in Indus Towers with a 47.95% stake, bought 1% or 26.95 million shares for ₹860 crore, raising its holding to 48.95%.
Buyers also included Ghisallo Capital Management LLC, Kotak Securities Limited, and Authum Investment and Infrastructure Limited, which bought 0.73%, 0.54% and 0.55%, respectively.
The entities selling the stake included Vodafone Group’s wholly owned indirect subsidiaries Euro Pacific Securities Ltd, CCII (Mauritius), Inc; Asian Telecommunication Investments (Mauritius) Ltd; Trans Crystal Ltd; Mobilvest; Prime Metals Ltd; Vodafone Telecommunications (India) Limited; and Al-Amin Investments Ltd.
Vodafone Group had said on Tuesday that it was set to sell 9.94% stake in Indus Towers through a bulk sale at a price range of ₹310- ₹341 per share, valuing the sale between $996 million and $1.1 billion.
However, the size of the share sale rose to 18% on Wednesday morning, with the value of the share sale rising to $1.8-1.9 billion.
Mint reported on Tuesday that private equity (PE) firm I Squared Capital and alternative investment firm Stonepeak were reported to be in the fray as buyers.
Buyers in the block deal have a 90-day lock-in period. Morgan Stanley, Bank of America, BNP Paribas and Jefferies ran the block deal.
Earlier, this February, private equity firm KKR and Canadian fund CPPIB also sold their entire stakes in Indus Towers.
KKR entity Silverview Portfolio Investments Pte Ltd sold 130.8 million shares, or 4.85%, at ₹210.21 apiece, aggregating ₹2,749.61 crore. CPPIB sold 2.14% at ₹212.15 apiece, aggregating ₹1,223.46 crore.
In 2022, Vodafone Group sold over 7% in Indus Towers, of which 4.7% was acquired by Bharti Airtel. The proceeds were routed to Vodafone Idea to reduce its debt. Currently, Vodafone Idea’s total debt stands at over ₹2.1 trillion.
On Wednesday at the BSE, Vodafone Idea’s shares closed 0.36% higher at ₹16.92; Indus Towers closed down 2.88% at ₹334; and Bharti Airtel closed 2.49% lower at ₹1,393.15.