Vodafone Idea (Vi) of India is looking to sell its data center operation, fixed-line broadband subsidiary, and optic fibre business, in order to reduce its debt.
The company hopes to raise approximately Rs 74,000 crore ($1 billion) through the sale of its data center business to cover debt repayment, adjusted gross revenue (AGR) payments, and spectrum dues.
According to the company’s most recent earnings report, it had gross debt of Rs 1,803.1 billion (US$2.4 billion) (excluding lease liabilities).
According to TotalTelecoms, the company expects to earn between $800 million and $1 billion from the sale, but investors are not overjoyed at these valuations. The proposed sale(s) could be structured as a sale and leaseback.
CFO Akshaya Moondra stated during an analyst call that the company hopes to raise Rs 3,000 crore ($403 million) in cash this fiscal year through tax refunds and the sale of land banks purchased for future data centres.
Vi was formed in 2018 following the merger of Vodafone India and Idea Cellular. Vodafone currently owns 45.1% of the combined entity, while Aditya Birla Group owns 26%. The company has reportedly been unable to secure new funding in light of its recent struggles.
Vodafone Idea operates a single data centre in Navi Mumbai and has approximately 160,000 kilometres of fibre optic cable. In 2019, the company attempted to sell its data centre business but was unable to find a buyer willing to match its valuation.
Numerous Asian telcos are reorganising their data centre operations. Singtel, the Singaporean telco, announced a reorganisation of the company in May, which will include the sale of infrastructure assets such as towers, satellites, subsea cables, and data centres. In South Korea, SK Telecom recently announced plans to split the company in half but retain its data centre operations.
