Vodafone India weighs stake transfer to boost unit capital: Report

Vodafone Group is considering transferring its 19% stake in Vodafone Idea to the Indian unit to keep it in the treasury, Bloomberg News reported on Friday, in a move to boost its capital after the Indian government cut the bill for outstanding spectrum fees.

The share transfer will replace fresh cash from the UK telecoms group and support Vodafone Idea’s debt raising efforts, the report said, citing people familiar with the matter.

The Mumbai-listed company may later sell shares to generate additional capital to repay government dues and invest in growth as it seeks to regain market share from rivals such as Reliance Jio Infocomm, the report said.

Vodafone Group declined to comment, while Vodafone Idea did not immediately respond to Reuters’ request for comment.

Late last month, Vodafone Idea, in which the Indian government owns 49%, said India had reduced its long-standing debt to 640.46 billion rupees ($6.75 billion) from 876.95 billion rupees.

The dues stem from a long legal dispute over the government’s method of calculating so-called adjusted gross revenue, which telecom operators have fought as this metric determines license fees and other dues.

The loss-making carrier is also in talks with lenders to borrow about 350 billion rupees ($3.7 billion), with State Bank of India likely to lead the financing consortium, Bloomberg reported, adding that most of the borrowing would be through term loans.

Shares of Vodafone Idea closed flat at Rs 11.24 in Mumbai on Friday.