(Bloomberg) -- Vodafone Idea Ltd., the debt-strapped Indian wireless carrier, sold its stake in a telecommunications tower firm for 37.6 billion rupees ($506 million), as part of efforts to shore up its strained finances.
The local arm of Vodafone Group Plc disposed of the 11.15% holdings in Indus Towers Ltd. to existing shareholders, the company said in a filing late Thursday. After the transaction, Bharti Infratel Ltd. will own 36.7% of Indus Towers, British operator Vodafone 28.1%, with the rest held by investors including KKR & Co. and Canada Pension Plan Investment Board.
However, Vodafone Idea won't receive all that cash. It owes the tower operator 24 billion rupees, which will be deducted from the total consideration, according to the statement.
The local venture of Vodafone, formed by the merger of its Indian operations and billionaire Kumar Mangalam Birla's Idea Cellular Ltd. has been seeking ways to raise cash after racking up more than $15 billion in net debt. It hasn't reported an annual profit since the merger was announced in 2017. Last December, Birla warned of a collapse in the absence of any relief after the nation's top court ordered it to pay billions of dollars in back fees to the government for spectrum and other charges.
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In September, Vodafone Idea said it was planning to raise as much as 250 billion rupees selling shares and debt. The company has been struggling in the face of competition from bigger rivals such as Bharti Airtel Ltd. and billionaire Mukesh Ambani's Reliance Jio Infocomm Ltd., which debuted in 2016 with free calls and cheap data and intensified a price war.
Vodafone Idea has been the weakest financially among Indian wireless carriers. It won partial relief in September when the Supreme Court allowed operators to stagger the payment of back fees over 10 years.
Shares of Vodafone Idea jumped 8.7% Friday in Mumbai, the most in a month, extending the year's rally to 63%. Bharti Infratel surged 18%, its biggest advance since March.
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