Vodafone Group (VOD) shares are rising in morning trading today after the telecommunications company sold an additional 10% stake in Vantage Towers co-management partner Oak Holdings GmbH for 1.3 billion euros ($1.4 billion).
The sale establishes a 50:50 joint ownership structure between Global Infrastructure Partners and a consortium led by KKR & Co KKR.
Vodafone is set to receive €1.3 billion from the transaction, with shares sold at €32 per share, in line with the original deal announced on November 9, 2022, bringing total proceeds from the sale of its Vantage Towers shares to €6.6 billion.
The proceeds will be used to reduce Vodafone’s debt, lowering its net debt/adjusted EBITDAaL by 0.1x.
This is consistent with Vodafone’s target to operate in the lower half of the leverage range of 2.25x to 2.75x.
Related article: Vodafone sells stake in India’s Indus Towers to reduce debt by $2.3 billion
Since taking over as CEO, Margherita Della Valle has sought to streamline Vodafone’s operations. Bloomberg reports that her strategy includes selling off underperforming markets and attempting a merger with CK Hutchison’s Three, which is currently undergoing competition review in the UK.
European telecoms operators, including Vodafone, are looking for innovative ways to generate revenue amid tough returns on capital investment, with many opting to sell parts of their infrastructure.
Vodafone’s share price has fallen about 8% over the past 12 months. Investors can get exposure to the stock through First Trust NASDAQ Technology Dividend Index Fund TDIV and Pacer Global Cash Cows Dividend ETF VWI.
Price Action: VOD shares were up 1.11% in pre-market trading at $9.13 as of last check on Monday.
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