Vodafone launches Vantage Towers float and pledges hefty dividend payouts

Vodafone has confirmed it will press ahead with plans to float its European telecom towers arm in a move reportedly set to value the division at 15 billion euros (£13 billion).

The mobile phone giant said it aims to spin off Vantage Towers through a listing on the Frankfurt Stock Exchange by the end of March.

But it stressed the timing of the initial public offering (IPO) is dependent on capital market conditions.

It said that, following the IPO, Vantage will pay out 280 million euros (£240 million) in dividends in July for this financial year and vowed to pay investors 60% of recurring free cashflow per year.

Analysts estimate the float of a minority stake in Vantage could raise up to 4 billion euros (£3.4 billion) for Vodafone, helping the group cut its debt.

It also comes amid a booming market for telecoms infrastructure, with Orange last week becoming the latest to enter the fray, saying it will set up a European tower company by the end of the year.

Vantage grew its portfolio by 450 new macro sites to 82,000 locations across 10 European markets in the nine months to December 31 to boost its reach.

Chief executive Vivek Badrinath said: “The IPO is an important milestone and sets the foundations for the next stage of our growth within the dynamic towers industry.

“We will be looking to capture the exciting value-creating opportunities the sector has to offer and to build on our position as a leading tower infrastructure company in Europe.”

Figures recently showed that Vantage notched up revenues of 725 million euro (£622 million) for the nine months to the end of 2020.

It also reaffirmed its financial targets, confirming that it expects to post adjusted earnings of between 520 million euro (£446 million) and 530 million euro (£455 million) for the year.