Vodafone Idea Says ‘No Proposal’ Before Board on Stake Sale to Google

Vodafone Idea said in the letter to stock exchanges that it “constantly evaluates various opportunities.”

By Jagmeet Singh | Updated: 29 May 2020 18:06 IST

Vodafone Idea Says ‘No Proposal’ Before Board on Stake Sale to Google

Vodafone Idea is currently struggling to survive due to mounting losses

Highlights

Vodafone Idea has said it will “comply with the disclosure obligations”
Google was said to acquire five percent stake in the operator
Vodafone Idea reported a quarterly loss of Rs. 6,439 crores in February

Vodafone Idea today released a clarification about the Financial Times report that had suggesting Google was exploring an investment in the operator. In a letter to the National Stock Exchange (NSE) and Bombay Stock Exchange (BSE), the operator said that “no proposal as reported by the media” has been considered by the board. Vodafone Idea is currently struggling though it has a significant share of mobile subscribers that makes it the second largest player — after Reliance Industries' Jio in the country. Jio has recently attracted about $10 billion in investments from Facebook and US private equity firms.

“As part of corporate strategy, the company constantly evaluates various opportunities for enhancing the stakeholders' value,” Vodafone Idea said in the letter to stock exchanges.

The letter also highlighted that the company “shall comply with the disclosure obligations” and will provide details to the stock exchanges as and when it will consider an investment proposal.

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“We wish to reiterate and clarify that the company will comply with SEBI Listing Regulations and duly keep the stock exchange informed of all the price-sensitive information,” it added.

The letter doesn't provide any clarity on whether Google approached Vodafone Idea to discuss the investment, which was reported by The Financial Times on Thursday. The report, citing one of the people familiar with the development, suggested that the Mountain View, California-based was considering buying a stake of about five percent in the telecom operator.

Hours after the report went out in the public and was cited by various news publications, Vodafone Idea share price surged over 30 percent earlier on Friday. The share price dropped down to about 13 percent increase at the time of filing this story, though.

The investment from Google would help Vodafone Idea better sustain its business that reported a quarterly loss of Rs. 6,439 crores in February, apart from losing seven million subscribers. The operator, which emerged after Britain's Vodafone Group and industrialist Kumar Mangalam Birla's Idea Cellular joined hands in August 2018, is facing a tough fight from Jio and Airtel.

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