UK-based cellco Vodafone is in talks with at least two private equity firms to sell a stake in its Indian unit, according to the Economic Times citing a person familiar with the matter. A few weeks ago, Vodafone agreed to pay US$5.46bn to buy out the…
UK-based cellco Vodafone is in talks with at least two private equity firms to sell a stake in its Indian unit, according to the Economic Times citing a person familiar with the matter.
A few weeks ago, Vodafone agreed to pay US$5.46bn to buy out the 33% stake of Essar Group in their JV, the mobile operator Vodafone Essar.
When the acquisition is completed, Vodafone will hold around 75% of Vodafone Essar. But FDI rules mean that a foreign company can own no more than 74% of an Indian company.
Therefore, Vodafone and Essar said they expected that 1.35% of the shares in the JV would be transferred to an Indian investor to ensure Vodafone still complied with FDI rules.
According to the Economic Times today, a larger stake may now also be sold to a PE fund. But this questions the possibility of a listing.
In late April, Vodafone CEO Vittorio Colao had been quoted saying that the company could consider an IPO of its Indian business. He reportedly added that the listing would only be considered after 2011 and would depend on the local demand for data offerings.
Vodafone did not respond to phone calls before the press deadline.
