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Vodafone share prices rise as $4.5 billion convertible bond sales planned

Vodafone shares have risen as much as 2% as the telecommunications raises $4.5 billion through the issuance of mandatory convertible bonds (MCBs)

The telecom giant plans to raise the money by selling bonds that will be converted into shares to fund the acquisition of Liberty Global’s assets in four European countries.

‘Vodafone intends to use the net proceeds of the offering as part of the financing of the acquisition of the Liberty Global assets in Germany, Czech Republic, Hungary and Romania, including the refinancing of bank loans that are repayable at par, and for general corporate purposes,’ The company said in a statement

It comes after Vodafone entered into an agreement with the US TV and broadband company Liberty Global to buy its operations in four European countries for 18.4 billion euro.

Vodafone announced that the MCBs will be issued in March 2021 and March 2022. The Bonds will be physically settled on mandatory conversion in accordance with their terms.

Vodafone said in a statement that it will be entitled to satisfy this delivery obligation by allotting and issuing new ordinary shares of Vodafone to bondholders or by transferring existing ordinary shares from treasury.

Vodafone said it would buy back the stock when the bonds mature.

Vodafone share price

After the news was released, Vodafone shares rose 2.2% to 134.18 pence on Tuesday morning.

After the bonds have been issued, Vodafone intends to apply for the bonds to be admitted to trading on Euronext Dublin's Global Exchange Market or another recognised stock exchange.

Vodafone share buy-back programme

Vodafone's share buy-back programme is being operated by J.P. Morgan Securities, which the company says will continue to operate during and after the share reference period for the determination of the initial conversion price.

This information has been prepared by IG, a trading name of IG Markets Limited. In addition to the disclaimer below, the material on this page does not contain a record of our trading prices, or an offer of, or solicitation for, a transaction in any financial instrument. IG accepts no responsibility for any use that may be made of these comments and for any consequences that result. No representation or warranty is given as to the accuracy or completeness of this information. Consequently any person acting on it does so entirely at their own risk. Any research provided does not have regard to the specific investment objectives, financial situation and needs of any specific person who may receive it. It has not been prepared in accordance with legal requirements designed to promote the independence of investment research and as such is considered to be a marketing communication. Although we are not specifically constrained from dealing ahead of our recommendations we do not seek to take advantage of them before they are provided to our clients. See full non-independent research disclaimer and quarterly summary.

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