Vodafone raises cash to reduce debt. The British telecommunications giant has reached an agreement for the sale of its Hungarian subsidiary, Vodafone Magyarorszag Zrt, to the companies 4iG and Corvinus, a holding company controlled by the State, for an amount of 1,7 billion euros ($1,82 billion. Proceeds from the sale will be used to reduce debt. The sale is expected to close by the end of the month.
Vodafone: from Read's farewell to the sale of the Hungarian subsidiary
The sale, first announced in August, comes as Vodafone looks for a new chief executive after the resignation presented in early December by Nick Read, who has failed to grow the group or strike the right deals to consolidate a fragmented European telecommunications market. In mid-November the company also unveiled a profit warning in which management reduced the free cash flow target by 4% on the current year (from 5,3 billion euros to 5,1 billion).
The interim managing director of the group, Margaret of the Valley, said in a statement that the Hungarian divestiture will increase competition and accelerate competition in Hungary.
For its part, thanks to this agreement, the Hungarian state will consolidate its grip on the telecommunications sector. Under the plan, 4iG will hold a 51% majority stake while lo state will hold a 49% stake. In recent times, Prime Minister Viktor Orban has expanded the influence of his nationalist government into sectors such as energy, banking and media, and now telecommunications as well.
Sulla London Stock Exchange, after the announcement, Vodafone shares lost 0,78% to 88,02 pounds.
