Vodafone sells Infostrada to Enel

Vodafone Group’s subsidiary Mannesmann AG has reached agreement for the sale of Infostrada SpA to Enel SpA.

The sale values Infostrada at EUR 12.1 billion comprising EUR 11.0 billion for the whole of the issued share capital of Infostrada and EUR 1.1 billion in relation to the assumption of net debt at 30 June 2000. The net debt of Infostrada at this date comprised EUR 0.8 billion of intra-group debt owed to Vodafone Group companies, the net present value of long term payments owed to the Ferrovie dello Stato of EUR 0.2 billion and other financial debt

The consideration for the equity will be EUR 5.5 billion in cash, EUR 2.5 billion of 1-year unlisted bonds and EUR 3.0 billion of 3-year listed bonds. The bonds will be guaranteed by Enel.

Under the terms of the agreement, the 1-year bonds are required to be held until maturity. In the first year following issue, any sale of the 3-year bonds is subject to Enel’s consent. Vodafone intends that the 3-year bonds be disposed of in due course

The agreement includes a market-related price adjustment. This adjustment may increase or decrease the consideration by a maximum of EUR 0.6 billion over a period of approximately 9 months following signing, depending on the performance of certain agreed stock market indices

The agreement is subject to the approval of the Mannesmann Supervisory Board and Italian and EU regulatory clearances.

The sale is expected to complete in the first quarter of 2001.

Vodafone will apply the proceeds of the sale to reduce group debt.

Chris Gent, Chief Executive of Vodafone, commented: ‘This transaction will raise considerably more cash with greater certainty than we could have achieved in an IPO and is in the best interests of our shareholders. In addition, we believe that Infostrada as part of Enel is better positioned to be a leading fixed line operator in Italy.’

Vodafone are at www.vodafone.com