Vodafone Shares Jump

Shares of Vodafone Group (VOD, VOD.L), the second-biggest mobile phone operator in the world, traded higher early on Friday after the company reported an improvement in revenue growth trends and finalized plans to monetize its tower assets across Europe to pay off debt.

The company said in a statement early on Friday that it has decided to legally separate its passive tower assets and create a new organization that will be operational by May 2020. Newly christened TowerCo will own Europe’s largest tower portfolio, comprising about 61,700 towers across 10 countries, with 75% of these sites in major markets such as Germany, Italy, Spain, and the UK.

Having secured network sharing deals in Italy, Spain, and the UK recently, Vodafone said it was proceeding with plans to monetize a substantial proportion of its European tower infrastructure during the next 18 months.

“The ultimate form of monetization may include an initial public offer or disposal of a minority stake in TowerCo, as well as potential disposals of minority or majority stakes at an individual country level,” the company, which plans to deploy the proceeds from the sale to reduce group debt, said in the statement.

In a trading update also released on Friday, Vodafone said organic service revenue slipped by 0.2% in the first quarter of fiscal 2020, from a sequential decline of 0.7% in the fourth quarter, while noting this gradual recovery was “expected to continue.”

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