In Short:
Indus Towers released the pledge on shares held by Vodafone Group, allowing Vodafone to sell 18% stake for Rs 15,300 crore. Indus released 17.98% shares held by Vodafone promoters to execute the sale but still holds a pledge on remaining 3.06% shares. Proceeds from the sale will be used to repay Vodafone UK’s lenders. Vodafone aims to clear existing lender dues with the sale. Indus shares closed 2.88% lower at Rs 334 on BSE.
Indus Towers Releases Pledge on Vodafone Group Plc Shares for Rs 15,300 Crore Stake Sale
Kolkata: Indus Towers has announced the release of the pledge on shares held by UK’s Vodafone Group Plc to facilitate the latter’s sale of an 18% stake in the telecom tower company for Rs 15,300 crore.
Details of the Pledge Release
According to Indus Towers, the pledge on 17.98% shares held by Vodafone Promoters was released on June 18, 2024, as part of the security package provided by Vodafone promoters. This move enables Vodafone to execute the sale of such shares. However, Indus mentioned that a secondary pledge on the remaining 3.06% shares held by Vodafone’s promoters in the tower company is still in place as per the extant security agreements.
Analysis by JP Morgan
Brokerage firm JP Morgan highlighted that the stake sale proceeds would be used to repay Vodafone UK’s lenders, in line with the security package agreed upon during the merger of Bharti Infratel and Indus Towers. Indus holds a secondary pledge on Vodafone’s residual stake with a maximum liability of Rs 4,250 crore.
Utilization of Sale Proceeds
Vodafone UK intends to utilize the proceeds from the 18% stake sale to clear a significant portion of its existing lender dues relating to borrowings secured against its Indian assets. However, there is uncertainty regarding whether any residual proceeds would be used to settle Vodafone Idea’s old dues to Indus Towers.
Market Reaction
Following this announcement, Indus shares closed 2.88% lower at Rs 334 on the BSE.
