Vodafone Idea cashed out of Indus Towers as the infrastructure unit completed a long-awaited merger with Bharti Infratel, though Bloomberg reported the move did less to ease the cash-strapped operator’s burden than headline figures suggest.
Bharti-Infratel informed India’s stock exchange of the completion of the deal late yesterday (19 November), explaining Vodafone Idea had sold its 11.15 per cent holding in Indus Towers for a cash payment of INR37.6 billion ($507.2 million).
Bloomberg noted INR24 billion of the total would be deducted to clear a debt owed to Indus Towers.
The merger leaves Bharti Infratel with a 36.7 per cent stake in Indus Towers; Vodafone Group 28.1 per cent; and investment companies including KKR and Providence Equity Partners holding the remainder.
Closure of the deal draws a curtain on a process spanning more than two years: original moves to combine the infrastructure businesses made in April 2018 hit problems as shareholders argued [1] over pricing.
Despite the sum owed to Indus Towers, the sale provides much-needed cash to Vodafone Idea as it tackles a tax demand for INR530 billion in adjusted gross revenue.
Earlier this year the operator’s board proposed schemes to raise up to INR250 billion [2] to boost its finances. It also made progress in its fiscal Q2 (calendar Q3), with a cost-cutting programme and higher ARPU contributing to a reduction in its net loss [3].
[1] https://www.mobileworldlive.com/asia/asia-news/shareholder-spat-casts-doubt-on-indus-infratel-merger
[2] https://www.mobileworldlive.com/featured-content/home-banner/vodafone-idea-rebrands-moves-to-raise-funds
[3] https://www.mobileworldlive.com/asia/asia-news/vodafone-idea-narrows-losses-as-arpu-climbs
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