9th Sep 10
Vodafone sells stake in China Mobile
by Harry Oldfield
Vodafone has announced that it has sold its 3.2 per cent stake in China Mobile for an estimated $6.5 billion, accounting for the largest such sale by the firm of its non-strategic investments. The buyers of the 643 million shares have not been identified, although it was reported that the shares were offered at a 3.4 per cent price lower than the current market rate.
According to a Vodafone representative, the firm plans on using the proceeds from the sale to buy back its own shares from Vodafone investors, as well as reduce the company debt. Roughly 70 per cent of the $6.5 billion, $4.55 billion, will be used for buy-back of shares, the representative said. In addition, Vodafone will continue to work with China Mobile regarding technological advancements in roaming, network roadmap development, multinational customers, and green technology.
Vittorio Colao, Vodafone chief executive, said that the sale of the shares in China Mobile amounts to a doubling of the return on the initial investment in the Chinese telecommunications firm. He went on to add that the successful transaction coincides with both the Vodafone corporate portfolio strategy as well as an on-going partnership with China Mobile regarding future telecommunications research and development.
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