Deal Street

May 15, 2019

Vodafone To Sell Record $3.6bn Rights Issue


Aditya-Birla-Group-Idea-Vodafone

S&R, CAM and Sidleys are in the fray to help Vodafone sell 3.6 billion dollars worth of shares in a right issue at 60% discount. This issue will more than triple its outstanding shares, according to Reuters.

The company’s rights issue opened on April 10 and closed on April 24. Rights entitlement ratio was issued at 87 equity shares for every 38 held by eligible shareholders as on the record date of April 2, 2019.

The promoters, that is the company’s United Kingdom’s Vodafone Group and the Aditya Birla Group will infuse up to Rs 11,000 crore and Rs 7,250 crore respectively in the rights issue.

According to ICICI Securities, Aditya Birla Group’s stake in Voda Idea will rise to 28.26% from 26.55% while Vodafone Group’s will come down to 44.24% from 44.78% after the two principal shareholders subscribe to their allotted shares. The combined promoter stake is expected to rise to 72.5% from 71.33%.

A Vodafone executive said, “The company has received very strong response to the issue during the roadshows, not just from existing investors, but also from those not part of the company as yet.”

S&R Associates led by Sandip Bhagat and Jabarati Chandra, partners of the firm, are advisors to Vodafone Idea Ltd.

Cyril Amarchand Mangaldas led by partners Yash Ashar and Abhinav Kumar with support from principal associate S. Vivek, consultant Shruti Sarkar and associate Tania Chourasia, Siddhant Sattur, Saee Athalye and Priyattama Bhanj, was counsel to the lead managers, Kotak Mahindra, DSP Merrill Lynch, Morgan Stanley, HDFC Bank and SBI Capital Markets.

Sidley Austin as foreign counsel advised lead managers led by a team of partners Manoj Bhargava, Nicholsas R. Brown, Ankit Kashyap and Brian M. Kaplowitz, their counsel Carla G. Teodoro, and assoiates Varun Jetley and Christian D. Molander-Barraza.

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