indus towers block deal: Indus Towers releases pledge to enable UK’s Vodafone to sell 18% stake in tower company

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Kolkata: Indus Towers said it has released the pledge on shares held by UK’s Vodafone Group Plc to enable the latter to sell an 18% stake in the telecom tower company for Rs 15,300 crore.

“…as per the terms of the security package provided by Vodafone promoters to secure the payment obligation of Vodafone Idea under the Master Services Agreements, the Company (read: Indus) released pledge on 17.98% shares held by Vodafone Promoters in the (tower) company on June 18, 2024, for them to execute the sale of such shares,” Indus said in a statement on Wednesday.

Indus, though, said it continues to hold a (secondary) pledge over the remaining 3.06% shares held by Vodafone’s promoters in the tower company as per the terms of the extant security agreements.

Brokerage JP Morgan has said as per a security package agreed upon during the merger of erstwhile Bharti Infratel and Indus Towers, Vodafone’s earlier 21.05% stake in Indus was the primary pledge by its lenders against the initial $1.4 billion loan Vodafone had taken back in 2019 to participate in its Indian telecom JV, Vodafone Idea’s rights issue. “If this share sale goes through, then the proceeds would be first used to repay Vodafone UK’s lenders,” the global brokerage had said.

Indus has a secondary pledge on Vodafone’s residual stake in the tower company with a maximum liability of Rs 4,250 crore. “It remains to be seen if Vodafone UK uses any residual proceeds from the current stake sale to clear a portion of Vodafone Idea’s old dues to Indus..there is no clarity yet as the current stake sale proceeds appear aimed at clearing the British telco’s existing lender dues,” a person aware of the matter told ET.Earlier in the day, UK’s Vodafone had said 18% Indus stake sale proceeds would be used to clear bulk of the UK company’s existing lender dues relating to €1.8 billion of borrowings secured against its Indian assets.Indus shares closed 2.88% lower at Rs 334 on the BSE.

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