Vodafone Idea today said it is not considering any proposal to sell its fiber optic assets, data centers and You Broadband for $1 billion, as reported by Economic Times newspaper.
However, responding to a different media report on the sale of its datacenter business and assets, it said these were not material enough for their sale or prospective sale to be disclosed to public investors.
“As a part of corporate strategy, the company constantly evaluates various opportunities for enhancing the stakeholders’ value…Currently, there is no proposal as reported by the media that is being considered at the Board,” it said, referring to the ET report.
On the second eport saying it was planning to sell its datacenter business, the company did not confirm or deny the news, clarifying that these assets were not material enough to be disclosed to the public in advance.
“The data centre business and the land meant for data centres referred to in the news item is owned by one of the subsidiary company, which is an unlisted entity and is not a material subsidiary. Further, the said assets were not material warranting disclosure under the SEBI Listing Regulations,” it said.
Under India’s listing rules, companies are supposed to inform their investors if they have taken a decision with material implications for its finances, such as a decision to sell a subsidiary or material asset.
UNDER PRESSURE
Vodafone Idea’s viability as a running concern is under doubt due to steep liabilities heaped on by a Supreme Court bench headed by Arun Mishra two years ago.
The company has been trying to lighten the load by pointing out that many of the calculations underlying the charges are riddled with errors, including arithmetical ones. However, it has not met with much success so far, and needs a cash-rich investor if it is to survive.
In this context, there has been much speculation about an asset sale by the company in recent days.
Various media reports have said that the company has been finding it difficult to raise money in exchange for selling a stake, and is therefore exploring the option of selling its assets.
Some reports have indicated that the company is also planning to sell its nearly 2 lakh km long optic fiber network. The optic fiber network is a key asset for the telecom company, as it carries its entire voice and data traffic.
There have also been reports that it is planning to sell its fixed broadband service, called You Broadband, which was acquired four years ago for around Rs 400 cr.
Reportedly, the company wants to raise around Rs 7,500 cr by selling all these three assets — the datacenters, the broadband unit, and the fiber network.
Three years ago, Reliance Communications had sold its nearly 1.8 lakh km long fiber network to Reliance Jio for Rs 3,000 cr, according to a regulatory filing by the company at the time.