Vodafone Sells Japanese Investment

Vodafone has finally confirmed that it is selling the landline operations it inherited from Japan Telecom Holding when it took control of Japan Telecom. The company is selling them to an affiliate of RHJ Industrial Partners, a Ripplewood Holdings investment fund. Vodafone is left with J-Phone, the company's wireless division which will be re-branded as Vodafone by the end of this year.

Vodafone is being paid US$2.23 billion, made up of US$1.9 in cash and US$320 million in redeemable preferred equity. The cash received will be used to reduce Vodafone's consolidated net debt. Japan Telecom Holdings intends to retain the redeemable preferred equity, which is transferable, at least until July 2004.

Subject to the fulfilment of certain conditions, including signing definitive agreements relating to bank financing, for which signed commitments have been received from 11 banks, the transaction is expected to close in the final quarter of calendar year 2003. Vodafone expects to cease consolidating Japan Telecom once the definitive agreements relating to the bank financing are signed, which is expected to occur in early October.

Arun Sarin, Chief Executive of Vodafone said: 'Since we took control of Japan Telecom in 2001, Vodafone has proved successful in developing the business under the dynamic leadership of Bill Morrow. We are confident that Ripplewood will continue to show the same high regard for Japan Telecom's customers, employees and suppliers and will be successful in growing the business further. Vodafone remains committed as a significant investor in Japan through our mobile subsidiary J-Phone. We continue to be encouraged by the excellent progress that J-Phone is making in a market place which has further growth potential.'

Japan Telecom generated 20.8% of Japan Telecom Holding revenues and 6.5% and 4.8% of Vodafone group revenues and EBITDA before exceptionals, respectively, for the year ended March 31, 2003."

Posted to the site on 22nd August 2003