28th Oct 2005 07:01
Vodafone Group Plc28 October 2005 28 October 2005 ACQUISITION OF A 10% ECONOMIC INTEREST IN BHARTI TELE-VENTURES IN INDIA Vodafone announces that it has agreed to acquire, through wholly-ownedsubsidiaries, an economic interest of 10% in Bharti Tele-Ventures Limited("BTVL") (the "Transaction") for a cash consideration equivalent to Rs.66.56billion (£0.82 billion). Commenting on the Transaction, Arun Sarin, Chief Executive of Vodafone, said: "I am delighted to announce this strategic partnership with BTVL, the leadingnational mobile operator in India. Together we will take this venture to a newlevel as clear leader in this market. We are entering a relationship with amajor company which shares our vision and values and understands, as we do, theenormous potential of mobile telephony in society. This transaction isconsistent with Vodafone's strategy of developing our global footprint in growthmarkets, where we can create value for shareholders." Commenting on the Transaction, Sunil Bharti Mittal, Chairman and Group ManagingDirector of BTVL, said: "We are delighted to have Vodafone as our additional partner to further developthe Indian telecom market. It is a matter of great pride for all of us at Bhartithat Vodafone has made its entry into India by way of a partnership with Bharti.Today when Bharti stands on the threshold of being a telecom powerhouse, thepartnership with Vodafone will help in achieving its vision of making Airtel themost admired brand in India." The consideration paid is equivalent to a purchase price of Rs.351 per BTVLshare and represents a 7.4% premium to the 5-day average share price of BTVL on27 October 2005. Vodafone has entered into an agreement to acquire: * a 4.39% economic interest in BTVL through Bharti Enterprises Private Limited ("Bharti Enterprises") * a 5.61% direct interest in BTVL from Warburg Pincus LLC ("Warburg Pincus") The Transaction is expected to be immediately enhancing to adjusted earnings pershare and will have no impact on Vodafone's share purchase programme. The principal benefits of the Transaction to Vodafone are that it provides: * Expansion of Vodafone's footprint into India, a large and under-penetrated market of global importance with significant growth potential - 4th largest economy in the world in PPP-adjusted terms with a population of 1.1 billion - 3rd largest mobile market in Asia with 65.1 million customers currently, after China and Japan where Vodafone is already present - mobile and fixed line penetration currently at approximately 6.0% and 4.4%, respectively - 53.3% year-on-year mobile market growth, representing 22.6 million customer additions * Investment in the fastest growing mobile operator in India - strong and highly respected management team - 14.1 million mobile customers as at 30 September 2005, equivalent to a 21.8% customer market share - one of only three Indian mobile operators with a nationwide footprint - in the six months ended September 2005, BTVL's mobile business delivered year-on-year growth of 62% in customers, 58% in revenues and 64% in EBITDA - in the six months ended September 2005, BTVL's fixed line business delivered year-on-year growth of 39% in customers, 30% in revenues and 34% in EBITDA * Active role in the partnership - the Transaction delivers material rights in BTVL as a result of which Vodafone is expected to proportionately consolidate BTVL - Vodafone will have the right to appoint two directors to the BTVL Board The acquisition of shares from Warburg Pincus is not subject to regulatoryapproval and is expected to close by the end of November 2005. The acquisition of shares in Bharti Enterprises is conditional on receipt of allnecessary unconditional regulatory approvals and certain customary conditions.The economic closing of this part of the Transaction is expected to occur in thefirst quarter of the calendar year 2006. -ends- For further information: Vodafone Group Investor Relations Media RelationsTelephone: +44 (0) 1635 664447 Telephone: +44 (0) 1635 664444 Notes to Editors Post transaction ownership structure (% based on current shares outstanding) ____________________ | | | Vodafone |______________________ |____________________| | | | | _________________|_________________ ________ _________ | | | | | | | | | Bharti Enterprises | | Others | | SingTel |______ | |___________________________________| |________| |_________| | | | | | | | | | | | | _________________|___________________________|_____________|____ | | | | | | | Bharti Telecom | | | |________________________________________________________________| | | | | 5.65 | |45.90 |15.84 __________|______________________________________________|_______________________________________|__ | | | BTVL | |____________________________________________________________________________________________________| ^ |32.61 ___________|___________ | | | Free Float | |_______________________| Vodafone will have an economic interest of 10% in BTVL post transaction on afully-diluted basis Source: BTVL, Vodafone, SingTel About Vodafone Vodafone is the world's leading mobile telecommunications group with operationsin 27 countries and partner network agreements in 14 markets across 5 continentswith over 165 million proportionate customers worldwide as at 30 June 2005. Forfurther information, please visit www.vodafone.com. About BTVL BTVL is the no. 1 mobile operator in India, where it offers nationwide GSMservices to 14.1 million customers as at 30 September 2005. BTVL, through itsfully-owned subsidiary Infotel, is also a leading provider of fixed-lineservices. Infotel's wireline and broadband division had 1.1 million customers asat 30 September 2005; Infotel also offers long distance and enterprise services.For the year ended March 2005, BTVL had consolidated revenues of Rs.80.0billion, consolidated EBITDA of Rs.30.1 billion and net income of Rs.15.0billion. For further information, please visit www.bhartiteleventures.com. Important information Figures for BTVL are for the 12 months ending 31 March 2005 extracted fromBTVL's FY2005 published financial results. Growth rates quoted are in IndianRupee terms. "Currently" refers to 31 August 2005 data. For illustrative purposes an exchange rate of Rs.81.5:£1 has been used. All ownership data is on a fully-diluted basis. This press release has been issued by Vodafone Group Plc and is the soleresponsibility of Vodafone Group Plc. UBS Limited ("UBS") is acting exclusively for Vodafone Group Plc and no one elsein connection with the Transaction and will not be responsible to anyone otherthan Vodafone Group Plc for providing the protections afforded to clients of UBSor for giving advice in relation to the Transaction or any other mattersreferred to in this press release. This press release does not constitute, or form part of, any offer or invitationto sell, or any solicitation of any offer to purchase any security in anyjurisdiction, nor shall it (or any part of it) or the fact of its distributionform the basis of, or be relied on in connection with, any contract thereafter. Cautionary statement regarding forward - looking statements This press release contains certain "forward-looking statements" within themeaning of the Private Securities Litigation Reform Act of 1995 with respect toour expectations and plans, strategy, management's objectives, futureperformance, costs, revenues, earnings and other trend information, includingstatements relating to expected benefits associated with the Transaction, planswith respect to the Transaction, and expectations with respect to long-termshareholder value growth and the actions of credit rating agencies.Forward-looking statements are sometimes, but not always, identified by theiruse of a date in the future or such words as "anticipates", "aims", "due","could", "may", "should", "will", "expects", "believes", "intends", "plans","targets", "goal" or "estimates". By their nature, forward-looking statementsare inherently predictive, speculative and involve risk and uncertainty becausethey relate to events and depend on circumstances that will occur in the future. There are a number of factors that could cause actual results and developmentsto differ materially from those expressed or implied by these forward-lookingstatements. These factors include, but are not limited to: regulatory approvalsthat may require acceptance of conditions with potential adverse impacts; riskinvolving our ability to realise expected benefits associated with theTransaction; the impact of legal or other proceedings; the risk that ARPUs maydecline or may decline more dramatically than expected; the risk that creditrating agencies downgrade or give other negative guidance with respect to ourdebt securities which may increase our financing costs; and the risk that, uponcompletion of the Transaction, we discover additional information relating toits business leading to restructuring charges or write-offs or with othernegative implications. In addition to the factors noted above, please refer to documents Vodafone GroupPlc has filed with, or otherwise furnished to, the US Securities and ExchangeCommission (the "SEC") under the US Securities Exchange Act of 1934, includingthe Annual Report on Form 20-F for the year ended 31 March 2005 and subsequentlyfurnished Form 6-Ks (which are available at the SEC's Internet site (http://www.sec.gov), for additional factors, risks and uncertainties that could causeactual results and developments to differ materially from the expectationsdisclosed or implied within the forward-looking statements made herein. Noassurances can be given that the forward-looking statements in this release willbe realised. All written or oral forward-looking statements attributable toVodafone Group Plc, any members of Vodafone Group or persons acting on ourbehalf are expressly qualified in their entirety by the factors referred toabove. Vodafone Group Plc does not undertake, and specifically disclaims, anyobligation to update or revise these forward-looking statements, whether as aresult of new information, future developments or otherwise. This information is provided by RNS The company news service from the London Stock ExchangeRelated Shares:
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