Vodafone sells stake to cut debt

MOBILE phones operator Vodafone raised e3.66bn (£2.27bn) in cash today by exercising an option to sell its remaining stake in the Atecs Mannesmann engineering and automotive business to German group Siemens.

Vodafone said it had sold its near-50% stake in the business by triggering an option it signed with Siemens when the two companies reached terms over an initial sale of a majority stake in the Atecs business in April last year.

The sale helps tidy up a large part of the remaining non-mobile phone assets acquired through Vodafone's £138bn share purchase of Mannesmann in 2000.

The sale leaves fixed-line business Arcor as Vodafone's remaining substantial non-core asset hangover from the Mannesmann purchase.

Vodafone is still in talks with railways operator Deutsche Bahn, which holds a minority 18% in Arcor, to finalise an exit from the fixed-line business.

The cash raised from the Atecs sale will go towards reducing Vodafone's debts. These have been swollen from £9.2bn to £17.2bn by the recent restructuring of Japanese operations, which means it now consolidates money owed by Japan Telecom.

Vodafone has pledged to reduce that debt pile by the end of its financial year on 31 March.

Vodafone shares rose 2 3/4p to 163 3/4p.