Vodafone Idea picks Bank of America, Morgan Stanley for ₹130 billion fiber assets sale

Vodafone Idea Ltd. has hired Bank of America Corp. and Morgan Stanley to help sell its fiber assets as India’s largest mobile carrier by users seeks to bolster its finances, people familiar with the matter said.

The bankers will initiate discussions with potential buyers for the fiber assets, which could be valued at as much as ₹130 billion ($1.9 billion), the people said, asking not be identified as the talks are private.

A final decision has yet to be made on the valuation and the stake to be sold, and the company could bring in more banks for the sale, the people said. Representatives for Vodafone Idea and Morgan Stanley declined to comment, while a Bank of America spokesman didn’t immediately respond to requests for comments.

A deal, if successful, would help the phone-service provider add to the funds it’s been raising to pare debt and fend off rivals Bharti Airtel Ltd. and billionaire Mukesh Ambani’s Reliance Jio Infocomm Ltd., an upstart that upended the market after its debut in 2016. In April, Vodafone Idea raised 250 billion rupees from a rights issue, building a war chest as India readies for a 5G network.

Vodafone Idea, which was formed by the merger of Vodafone Group Plc’s local unit with tycoon Kumar Mangalam Birla’s Idea Cellular Ltd., has reported losses in every quarter since the deal was announced in 2017.

Both Bharti Airtel and Vodafone Idea top the list of Asian peers with highest borrowings, according to data compiled by Bloomberg.

Mumbai-based Vodafone Idea is in the process of transferring all of its fiber assets into a separate company before the sale. The unit has about 158,000 kilometers (98,177 miles) of fiber, according to a presentation posted on its website in February.

Shares of Vodafone Idea fell 5.4% on Thursday, the biggest drop in almost two months. The stock declined 50% this year, while India’s benchmark Sensex index rose 7.8%.

IDEA Cellular Limited