Masts sell-off raises billions for Vodafone

Vantage deal will cut huge debt pile

VODAFONE has agreed to sell off a chunk of its phone masts division in a deal that could earn it up to £6.2bn and help reduce its £36bn debt pile.

the telecoms giant last year floated Vantage towers, which has 83,000 sites in ten countries across europe including the uK and is now valued at nearly £13bn, on the Frankfurt stock market.

Vodafone still owns 82pc of the company but will now split that controlling stake in a joint venture with new York-based investors Global Infrastructure Partners (GIP) and KKr.

the deal – which the Mail on sunday revealed in september was in the pipeline – is partly bankrolled by saudi Arabia’s Public Investment Fund (PIF).

the Gulf kingdom’s state entity also controls newcastle united and has a major stake in luxury car maker Aston Martin.

It could mean Vantage’s time as a publicly-listed company proves short-lived, as the consortium will offer to buy the 18pc not owned by Vodafone from minority investors.

the deal values Vantage at just over £28 per share, a third higher than its price going public last year, and at the top end of the price analysts had expected.

Vantage shares rose 12pc on the announcement. Vodafone was down 2% or 2.1p at 104.1p.

the new corporate structure is expected to make it easier for Vantage to finance expansion by building more towers to extend coverage –and take over other european operators, possibly including a buyout of the joint venture it operates in the UK.

Vodafone chief executive nick read described the deal as a landmark moment.

He added: ‘this significantly increases Vantage towers’ financial flexibility to capture future growth opportunities both organic and inorganic.’

read said the deal enabled Vodafone both to cash in on the business’s value and retain control of key infrastructure needed to roll out 5G networks.

the deal is also likely to be seen as a powerful riposte to activist investors who have been critical of his performance since his appointment in 2018 and want to see sweeping change at the Ftse 100 giant.

the amount of money Vodafone receives from the deal depends on how much of its stake GIP and KKR agree to buy – up to 50pc – and how many minority investors agree to sell out to the new ownership consortium. that could leave Vodafone with proceeds of between £2.8bn and £6.2bn.

the deal is expected to complete in the first half of next year.

read said that it was the latest ‘key milestone’ in the development of more infrastructure to power 5G networks over the coming decade.

Asked about the involvement of saudi Arabia’s sovereign wealth fund, he said that while the investment was led by GIP and KKR ‘clearly they access capital from around the world from different source and PIF is just one of those many sources of capital’.

read added: ‘Clearly they’re a large investor worldwide and involved in many investments in high quality assets of which I think Vantage towers is one.’

Asked about other potential takeover deals, read said that there were ‘ a lot of operators looking at potentially selling their assets’ and pointed to reports that telefonica and liberty Global were considering offloading their stakes in Cornerstone, a UK towers venture that is 50pc owned by Vantage.

‘If they were exiting that maybe presents an opportunity for Vantage,’ he said.

‘there’s many other countries I could go round. now we have these partners with depth of funding as well the combination could be very powerful.’

VODAFONE EYES MULTI-BILLION POUND SALE TO CUT DEBT