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Airtel signs agreement with Vodafone to buy 4.7 per cent stake in Indus Towers

"Any such acquisition shall only be done when such proceeds are confirmed to be utilised by Vodafone to infuse as equity into VIL including any regulatory or shareholders' approval being fully obtained," the company said.

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Mumbai: Telecom operator Bharti Airtel on Friday said it has entered into an agreement with Vodafone to acquire 4.7 per cent equity interest in Indus Towers provided that the British firm telecom operator utilizes the proceeds of the transaction to invest in its Indian subsidiary and to clear the dues of Indus Towers.

The transaction will be on the principal condition that the amount paid shall be inducted by Vodafone as fresh equity in Vodafone Idea (VIL) and simultaneously remitted to Indus Towers to clear VIL’s outstanding dues, the company said in in statement issued here. Debt-laden Vodafone has been facing challenges in clearing dues of Indus Towers.

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“Any such acquisition shall only be done when such proceeds are confirmed to be utilised by Vodafone to infuse as equity into VIL including any regulatory or shareholders’ approval being fully obtained,” the company said.

According to Airtel, with the likely introduction of 5G in the future, a lot more infrastructure would be required in which Indus Towers, an undisputed leader, has a significant role to play and partake the potential growth in the business.

“We believe this transaction allows Airtel to secure continued strong provision of services from Indus Towers, protects and enhances Airtel’s value in Indus Towers, enables it to receive rich dividends and as also paves the way for subsequent financial consolidation of Indus Towers in Airtel,” it said.

The telecom major noted that the transaction shall be value accretive to Airtel and protect its existing significant shareholding in Indus Towers. The transaction is also protected with a capped price which is lower than the price for the block of Indus shares sold by Vodafone on February 24, 2022.

“We believe that this self-paying capital allocation serves multiple strategic purposes for Airtel,” it said. Bharti Airtel further said that the stability and sustenance of a specialised and strong infrastructure company like Indus Towers is vital for a continued strong provision of co-location services including the support to rollout 5G.

“Such stability warrants a strong and stable shareholding structure to ensure financial stability and flexibility to respond to evolving needs of telecom operators,” it noted. Reiterating its commitments, Aitel said that it will look at opportunities for monetizing its stake in Indus Towers at an appropriate time.

“In doing so it will ensure that the tower company has been stabilized and any new strategic or financial investor/s has the ability to continue to serve the critical needs of Airtel,” the company added.

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