I Squared Capital and Stonepeak Compete for Vodafone’s Indus Towers Stake in a $2.3 Billion Transaction
Introduction
I Squared Capital and Stonepeak, two prominent firms, are in the running to acquire Vodafone Group Plc’s 21.5% holding in Indus Towers Ltd, a deal estimated at approximately $2.3 billion. The discussions have progressed to an advanced stage, according to sources conversant with the matter.
Recent Developments
Reuters reported on 14 June that Vodafone Group was contemplating divesting its entire stake, valued at $2.3 billion based on the closing stock price in Mumbai. The divestment is being managed by Bank of America, Morgan Stanley, and BNP Paribas through stock market deals.
Features and Benefits:
- The potential value of the deal stands at around $2.3 billion
- Advanced discussions have progressed
- Management is overseen by Bank of America, Morgan Stanley, and BNP Paribas
Statements from Key Parties
An I Squared Capital spokesperson, while refraining from commenting on the ongoing negotiations, expressed a willingness to inform about any future developments. Bank of America and BNP Paribas spokespersons declined to comment, and queries directed at various entities involved in the transaction did not receive responses at the time of publication.
Emphasizing Customer Importance
Vodafone Group holds a 21.5% stake in Indus Towers, which boasts over 219,736 towers across all 22 telecom circles in India. Bharti Airtel Ltd is the leading shareholder with a 47.95% stake.
Addressing Financial Obligations
Vodafone Group has offered its stake in Indus Towers as collateral to settle the dues owed by Vodafone Idea, its Indian arm. The outstanding amount is estimated to be approximately ₹10,000 crore. The application of the proceeds from this stake sale remains uncertain.
Implications for Vodafone Idea
While Vodafone Idea conducted India’s largest follow-on offer (FPO) in April, raising ₹18,000 crore, the funds cannot be utilized to settle the dues owed to Indus Towers. The chairman of Bharti Airtel has insisted on the settlement of pending dues, highlighting the critical importance of resolving these financial obligations.
Adjustments and Partnerships
Vodafone Group previously divested over 7% of its holding in 2022, with 4.7% being acquired by Bharti Airtel. The proceeds were used to alleviate Vodafone Idea’s debt burden, which currently exceeds ₹2.1 trillion.
Expansion and Investment Track Record
Stonepeak, a well-established alternative investment firm based in New York with assets under management amounting to $65.1 billion, has joined the fray. On the other hand, I Squared Capital has a strong presence in India’s infrastructure sector. The firm has a history of significant investments and partnerships, including the acquisition and subsequent sale of Amplus Energy Solutions Pvt. Ltd to Petronas. Moreover, they have established a climate solutions platform, Hexa Climate Solutions, and have significant investments in various ventures.
Key Takeaways:
- Potential acquirers vying for a stake in Indus Towers
- Vodafone Group’s strategic divestment continues to garner attention and speculation
- The management of tower infrastructure in India remains a critical aspect for telecom industry players
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In the fast-paced world of telecommunications, big players like I Squared Capital and Stonepeak are vying for a piece of the action. This time, they have set their sights on Vodafone Group Plc’s 21.5% stake in Indus Towers Ltd, a deal that could be worth around $2.3 billion. As the discussions reach an advanced stage, the outcome will have significant implications for the telecom industry landscape.
Recent Developments
News broke on 14th June that Vodafone Group was considering selling its entire stake in Indus Towers, valued at $2.3 billion based on the closing stock price in Mumbai. To facilitate the sale, Bank of America, Morgan Stanley, and BNP Paribas have been hired as trusted advisors, responsible for managing the intricacies of this stock market deal.
Key Statements
While the firms involved are tight-lipped about the ongoing negotiations, a spokesperson from I Squared Capital expressed that any future news or developments would be diligently communicated. Bank of America and BNP Paribas spokespersons chose not to comment, and responses to queries sent to Indus Towers, Vodafone Group, Stonepeak, Morgan Stanley, and Bharti Airtel are yet to be received at the time of publishing.
Emphasizing Customer Importance
Indus Towers, with its impressive network of over 219,736 towers covering all 22 telecom circles in India, plays a crucial role in the telecom infrastructure landscape. Vodafone Group currently owns a 21.5% stake in this powerhouse, but Bharti Airtel Ltd holds the majority stake with 47.95%. The outcome of this potential deal will undoubtedly impact the telecom services provided to millions of Indian customers.
Addressing Financial Obligations
One of the potential motivations behind Vodafone Group’s decision to divest its stake in Indus Towers is to settle dues owed by its Indian arm, Vodafone Idea. The estimate of these dues stands at an impressive ₹10,000 crore. However, it is yet to be determined if the proceeds from this stake sale will be allocated towards this debt settlement.
Implications for Vodafone Idea
Vodafone Idea recently raised ₹18,000 crore through India’s largest follow-on offer (FPO) in April. Despite this substantial infusion of funds, Vodafone Idea is restricted from using this capital to pay off its dues to Indus Towers. The chairman of Bharti Airtel, Sunil Mittal, has made it clear that Vodafone Idea must settle its pending dues to ensure uninterrupted services.
Adjustments and Partnerships
In their pursuit of growth, both Stonepeak and I Squared Capital have made significant investments and forged partnerships. Stonepeak, headquartered in New York and managing assets worth $65.1 billion, brings its expertise as an alternative investment firm to the table. On the other hand, I Squared Capital has a strong presence in India’s infrastructure sector. They have previously made notable investments, such as the sale of Amplus Energy Solutions Pvt. Ltd to Petroliam Nasional Bhd (Petronas). Additionally, they have established Hexa Climate Solutions, a climate solutions platform, and have investments in Cube Highways and Infrastructure Pte. Ltd, one of India’s most prominent toll road operators.
Conclusion
As the telecom industry landscape continues to evolve, the tussle between I Squared Capital and Stonepeak for Vodafone Group’s stake in Indus Towers has captured significant attention. The outcome of this deal will not only impact the financial future of these companies but will also have far-reaching implications for millions of Indian telecom users. The resolution of outstanding dues and the subsequent allocation of funds will shape the future of telecom infrastructure in India.
From the latest developments to customer implications and the perspectives of key players, this article provides valuable insights into the ongoing negotiations and their potential impact.
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