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Vodafone sells China Mobile stake

Vodafone is selling its 3.2% stake in China Mobile, according to published reports.

According to The Financial Times, the stake is worth $6.6bn and was bought in two tranches in 2000 and 2002 for almost $3.3bn. It is believed that 70% of the proceeds from the sale will be returned to shareholders in the form of a share buyback, and the remainder will be applied to group’s net debt, which stands at $51bn.

Despite the sale, Vodafone’s chief executive Vittorio Colao claimed that the two telecom giants would continue with the strategic alliance that they formed in 2000 to work together on mobile phone technology.

“Today’s transaction achieves a near doubling of Vodafone’s original investment in China Mobile and combines our stated portfolio strategy with ongoing co-operation with China’s leading telecommunications company,” said Colao.

Martina Lacey, London