Veon $940m tower sale collapses while Vodafone’s new CEO hints at new deals

17 September 2018 | Alan Burkitt-Gray

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Vodafone’s new CEO says he is thinking of selling the group’s mobile masts, while Veon’s deal to sell its masts in Pakistan to Axiata for $940 million has unravelled.

Nick Read (pictured), who succeeds Vittorio Colao as CEO in October, said at a Goldman Sachs conference in New York that the group wants to reduce its €31 billion net debt – a figure increased by its acquisition of part of Liberty Global’s European operations.

He is looking for asset sales, said Read, who is CFO of the group. “Towers are also under consideration,” he said, quoted in the Financial Times, which estimates that Vodafone controls 55,000 of its 110,000 towers across Europe. A disposal may raise as much as €12 billion.

Read hinted that Vodafone will contemplate joint ventures rather than disposals, according to the report, saying that the group is “more open to different formulas”.

Meanwhile Axiata and Veon announced today that a planned sale of 13,000 towers will not go head. Veon simply said: “The parties have not received all the regulatory approvals required for the transaction and the extended long-stop date of 14 September 2018 has now passed.”

Veon was hoping to sell the towers belonging to its Pakistan subsidiary PMCL – which operates as Jazz – to Axiata’s tower subsidiary Edotco, which itself boosted its tower portfolio last year by adding Tanzanite’s 700 towers in Pakistan for $90 million.

Axiata said in August 2017 that it was planning to buy the expanded mobile tower unit for $940 million.

Axiata gave a little bit more detail in its announcement: “The transaction was subject to a number of conditions and terminated due to the non-fulfilment of the conditions precedent to the SPA [sale and purchase agreement] within the stipulated timeframe, in particular regulatory approval for the resulting change of control contemplated under the SPA.”

It said it “remains committed to Pakistan and will continue to grow its existing business under Edotco Pakistan. But Jazz is the biggest mobile operator in Pakistan, with a 37% market share after being created in 2015 with the merger of Mobilink and Warid – so the collapse of the deal will put a hole in Axiata’s growth plans. The acquisition would have increased Edotco’s existing portfolio of 26,000 towers by 50%.

Suresh Sidhu, CEO of Axiata’s edotco tower group, said: “We do not foresee this affecting our business goals and aspirations. We are confident in the potential of the growing market in Pakistan and are committed to the existing operations there.”

Arif Hussain, who runs edotco in Pakistan, said: “We remain focused on building the business in Pakistan.”