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About 19.07 crore of these shares, equivalent to a 7.1% shareholding, are currently pledged to Indus Towers (the "Primary Shares") as part of the security arrangements entered into between Vodafone and Indus (the "Security Arrangements") at the time of the merger of Indus Towers with Bharti Infratel.
Vodafone announced that it has launched a placing of 6.36 crore Primary Shares in Indus through an accelerated book build offering (the "Placing"). This represents 2.4% of Indus' outstanding share capital.
Vodafone is also in advanced discussions with one of the largest shareholders in Indus for the purchase of up to 12.71 crore Indus shares from Vodafone, or 4.7% of Indus' outstanding share capital, which represents the remaining balance of Primary Shares.
The terms of such an agreement are currently being discussed and there can be no certainty that the sale will proceed. Should the sale be completed, Vodafone would retain 56.72 crore shares in Indus, or a 21% shareholding (the "Residual Shareholding").
In addition, Vodafone is also in discussions with several interested parties in relation to a potential sale of the Residual Shareholding. A further announcement will be made as soon as practicable if any further agreements are reached.
Vodafone and the Aditya Birla Group ("ABG"), the promoters of Vodafone Idea ("Vi"), are committed to support Vi in its efforts to strengthen its balance sheet. The first step in this process included the conversion of $2.1 billion of AGR and spectrum interest into equity, which will make the Indian Government the largest shareholder of Vi. Vodafone and ABG intend to contribute towards an issue of equity shares by Vi (a "Capital Raise") once the terms of such a Capital Raise have been evaluated and decided on by the Board of Directors of Vi.
Vodafone and Indus have modified the Security Arrangements in order to allow Vodafone to dispose of the pledged Primary Shares and use the proceeds to participate in an issue of new shares by Vi, referenced above. The modified terms will continue to provide security to Indus for an equivalent amount of payments by Vi under the Master Services Agreements. Any residual proceeds from the sale of the Primary Shares that are not used by Vodafone to subscribe for new shares in Vi will be available to Indus until 19 November 2022 to guarantee Vi's obligations under the Master Services Agreements.
Following the announcement, shares of Indus Towers tumbled 14.47% to Rs 214.85 and Vodafone Idea tumbled 5.88% to Rs 10.09 on the BSE.
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