Vodafone preps sale of French and Polish holdings; mulls lift of Indian stake

Vodafone bean counters will be hard at work as the management prepares to sell its shareholding in French-based SFR and Poland's Polkomtel. Meanwhile, this same group will be scanning their spreadsheets over the possibility of Vodafone increasing its investment in the telecoms joint venture with conglomerate Essar Group, Vodafone Essar.

The SFR deal is still at an early stage with Vodafone taking advice from bankers as to the highest value it can extract for its 45 per cent holding in the French operator.

Senior management is thought to be pressing for an imminent sale, which is expected to fetch as much as £6 billion for UK-based Vodafone. However, bankers have yet to be appointed to advise and negotiate the deal until SFR's majority stakeholder, Vivendi, confirms it is ready to purchase Vodafone's share.

The situation with Vodafone's 25 per cent holding in the Polish operator Polkomtel (valued at around £4 billion) would seem further advanced with long-time adviser Goldman Sachs in the frame to be appointed to handle the sale.

The other four shareholders are also looking to sell their investments with Private Equity firms being viewed as the most likely buyers.

US-based TPG and Blackstone Group are rumoured to be working on a joint bid, while London-based CVC Capital Partners and Apax Partners are planning stand-alone offers. Other possible interested parties include Turkcell, Orascom Telecom and KPN.

While Vodafone is divesting itself of minority holdings in Europe, the company's CEO Vittorio Colao has indicated that he was looking to increase the investment in its Indian JV, Vodafone Essar.

However, Colao said that, while Vodafone was financially ready to up its stake from 66 per cent, any move would depend on Essar's strategy. This is thought to refer to its JV partner, Essar Group--which holds 33 per cent of the joint entity in Vodafone Essar--triggering its option to sell its entire interest to Vodafone for US$5 billion by May 2011.

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