Rumour Mill II: Vodafone to re-examine overseas assets?

Vodafone is reported to be considering the disposal of its minority shareholdings in networks in Poland, China and France. The move by the UK operator, the world's largest in terms of revenue, is aimed at reassuring investors who have expressed concern at the poor performance of these assets.

Analysts emphasised that the company is not under any duress to dispose of its assets in order to reinforce its balance sheet or cash flow, it is purely a move aimed at soothing investors. The first target for Vodafone's planned withdrawal is likely to be Poland where the company owns around 25 per cent of the leading Polish operator Polkomtel, whose other investors have in fact recently been discussing alternative arrangements. In China, Vodafone owns about 3.2 per cent of China Mobile which analysts agree is an easier option for disposal. The sale of these two assets will probably be followed by the sale of Vodafone's 44 per cent stake in French operator SFR. The disposal of these small minority stakes could raise well over £10 billion, which could possibly be used to pay off debt or tax bills, to buy spectrum or to increase share buybacks. The company's 45 per cent stake in Verizon Wireless, which it owns jointly with Verizon, is another asset that has caused concern amongst investors as it has not paid a dividend for several years. Vodafone is likely, however, to hang on for a dividend rather than considering a possible sale.

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