Telecom operator Bharti Airtel on Friday said it has signed an agreement to buy Vodafone's 4.7 per cent stake in Indus Towers on the condition that the proceeds will be used for investment in Vodafone Idea and clearing dues of the mobile tower company.
Debt-ridden Vodafone Idea (VIL) has been unable to pay dues of Indus Towers, and both VIL and promoter Vodafone has proposed a payment plan to clear the outstanding amount by July 15.
In the meantime, VIL has committed to pay a certain minimum amount each month to Indus Towers.
"Bharti Airtel has...entered into an agreement with Vodafone to buy 4.7 per cent equity interest in Indus Towers on the principal condition that the amount paid shall be inducted by Vodafone as fresh equity in Vodafone Idea Limited (VIL) and simultaneously remitted to Indus Towers to clear VIL's outstanding dues," Airtel said in a statement.
The Sunil Mittal-led firm said the purchase would be at an attractive price representing a significant discount typically available for such large block transactions.
"In addition, Airtel is also protected with a capped price which is lower than the price for the block of Indus shares sold by Vodafone on February 24, 2022. This shall be value accretive to Airtel and protect its existing significant shareholding in Indus Towers. Any such acquisition shall only be done when such proceeds are confirmed to be utilized by Vodafone to infuse as equity into VIL including any regulatory or shareholders' approval being fully obtained," Airtel said.