Vodafone-Idea receives interest from PE players for its optic fiber business

In what could be a lease of life for Vodafone-Idea, the company has received interest from a few PE players including marquee names like Brookfield Asset Management and KKR for its optic fiber business, sources told CNBC-TV18.

The company has inter and intra city fiber spread across 160,000 kms in India. It has been looking at selling this business as a part of its plan to monetize assets and raise capital.

“The company has been talking to investors to gauge interest. So far Brookfield and KKR expressed interest but in the two, Brookfield is the most interested party. In fact, Brookfield teams have already started due diligence on the deal which is expected to take between 2-4 months’ time,” said a source familiar with the development.

In the quarter ending December 31, 2020, Vodafone-Idea had a net debt of Rs 1.03 lakh crore. Its largest liability at this point is the AGR dues which the government pegs at Rs 53,000 crore. Of this, Vodafone has paid Rs 6,854 crore which it says is the principal amount. As per Vodafone’s assessment, its AGR dues stand at Rs 21, 533 crore.​

“Vodafone is hoping to get between $1.5-$2 billion via the sale,” said a second source asking not to be named. “The optic fiber portfolio of Vodafone is very lucrative and even on a conservative note, Vodafone-Idea should not get lesser than $1.4 billion for the business,” he added

If Vodafone-Idea gets the right valuation and is able to complete the deal, this could be the much needed push it needs to be able to survive and take business forward in the country.

―CNBC TV18