Vodafone has slashed almost €5 billion off its net debt since September 2010, by pumping the proceeds of minority stake sales into a debt reduction strategy.
The UK-headquartered operator has generated cash income of €13.4 billion from the sale of minority stakes in China Mobile, SFR and – most recently – Polkomtel. The sales are part of a strategy by chief Vittorio Colao to dispose of minority interests – or as the carrier puts it, “to realize value from its non-controlled assets.”
In addition to writing down its net debt, the firm has been pumping the proceeds of some sales into buying back its own shares. The carrier used €3.75 billion from its sale of SFR to Vivendi for this element, and €3.2 million from its China Mobile deal in 4Q10.
However the proceeds of its most recent sale – the offload of 24.4% in Polish operator Polkomtel to Spartan Capital Holdings that was agreed last week – will all go towards debt reduction.
There is still no official word on whether Vodafone will seek to sell its 45% stake in US carrier Verizon Wireless. The firm appears committed to the US operator after last week shooting down reports it will seek a $5.5 billion (€3.7 billion) dividend payment in 2012.
A spokesman told Wall Street Journal the figure is a mathematical maximum and doesn’t signal a change in its strategy towards the US carrier.