Voda­fone ig­nores In­dia con­cerns

The Sunday Telegraph - Money & Business - - Business - By Christo­pher Wil­liams

VODA­FONE is poised to launch a mas­sive ex­pan­sion in Europe de­spite un­cer­tainty over the fate of its strug­gling In­dian oper­a­tion.

The tele­coms gi­ant is in ad­vanced talks with Lib­erty Global, the owner of Vir­gin Me­dia, about a takeover of ca­ble net­works in Ger­many, the Czech Repub­lic, Hun­gary and Ro­ma­nia.

Dis­cus­sions over a deal co­de­named “Project Scor­pio” that is es­ti­mated to be worth €21bn (£18.5bn) are in their fi­nal stages. Mike Fries, the chief ex­ec­u­tive of Colorado-based Lib­erty Global, flew into Lon­don last week.

It is un­der­stood that Voda­fone plans to brush aside City con­cerns that its trou­bles in In­dia could be an ob­sta­cle.

The op­er­a­tor is in the late stages of reg­u­la­tory clear­ance for a merger of Voda­fone In­dia with ri­val Idea. The de­fen­sive deal was un­veiled last year af­ter Mukesh Am­bani, In­dia’s rich­est man, launched a price war.

The merger is due to re­move Voda­fone In­dia and ap­prox­i­mately €8bn of debt from the Voda­fone bal­ance sheet and is viewed by an­a­lysts as cru­cial to the fi­nan­cial flex­i­bil­ity re­quired to com­plete the deal with Lib­erty Global.

How­ever, In­dian of­fi­cial­dom has not yet granted the fi­nal reg­u­la­tory clear­ance in a com­plex and un­pre­dictable process. Fail­ure could crys­tallise heavy losses for Voda­fone as Mr Am­bani con­tin­ues to ap­ply heavy pres­sure.

Voda­fone is due to ar­gue a sep­a­rate merger in In­dia in­volv­ing mo­bile masts of­fers nec­es­sary cer­tainty to make its Europe move. It de­clined to com­ment.

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