HIGHLIGHTS
- VIL has been unable to generate cash to pay Indus Towers' dues.
- The money will be utilised to invest in VIL and pay off debts.
- The transaction's financial specifics have not yet been released.
Bharti Airtel announced on Friday that it has inked a deal to purchase Vodafone's 4.7 percent ownership in Indus Towers on the condition that the revenues be used to invest in Vodafone Idea and settle the mobile tower company's debts.
Debt-ridden Vodafone Idea Limited (VIL) was unable to pay Indus Towers' dues, and both VIL and promoter Vodafone presented a payment plan to settle the unpaid sum by July 15. Meanwhile, VIL has agreed to pay a fixed minimum amount to Indus Towers each month.
"Bharti Airtel has entered into an agreement with Vodafone to buy 4.7 percent equity interest in Indus Towers on the principal condition that the amount paid be inducted as fresh equity in Vodafone Idea Limited (VIL) and simultaneously remitted to Indus Towers to clear VIL's outstanding dues," Airtel said in a statement.
The Sunil Mittal-led group stated that the purchase will be at a favourable price, marking a considerable reduction on the average pricing for such big block deals.
"Moreover, Airtel is covered by a capped price that is lower than the price for the block of Indus shares sold by Vodafone on February 24, 2022." This would add value to Airtel while also protecting its current large stake in Indus Towers.
"Any such transaction shall only be completed after such funds have been verified to be used by Vodafone to infuse as equity into VIL, including full regulatory or shareholder clearance," Airtel stated.
