Vodafone 2005 Annual Report Download - page 25

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Business |23
Safaricom
On 10 January 2003, under an agreement with Mobitelea Ventures Limited, the Group
completed the purchase of a 5% indirect equity stake in the Group’s Kenyan associated
undertaking, Safaricom Limited (“Safaricom”), for approximately $10 million
(£6 million), increasing the Group’s effective interest in Safaricom to 35%.
Investments
China Mobile
The Company has a strategic alliance with China Mobile (Hong Kong) Limited (“China
Mobile”) which sets out the principal terms for co-operation between the two parties in
mobile services, technology, operations and management.
On 18 June 2002, the Group invested $750 million in China Mobile and obtained the
right to appoint a non-executive director to the China Mobile board. The Group’s stake
in China Mobile increased from approximately 2.18% to approximately 3.27% as a
result of this transaction.
Disposals
During the three year period ended on 31 March 2005, the Group has disposed of a
number of interests in companies that were outside the Company’s core business and
were originally acquired as a consequence of certain acquisitions. The Group has used
the proceeds from these disposals to reduce its indebtedness.
Mannesmann businesses
Arcor rail business
On 25 January 2002, the Group announced that Arcor, the Group’s German fixed line
business, had agreed terms for the sale of its railway-specific business, Arcor DB
Telematik GmbH (“Telematik”), to the German rail operator Deutsche Bahn, for €1.15
billion (£709 million), €1 billion of which was received on 26 March 2002. The sale
completed in April 2002 following receipt of all necessary approvals and registration in
the German commercial register. On completion, Arcor sold 49.9% of Telematik’s
equity to Deutsche Bahn and entered into a put / call arrangement governing the
remaining 50.1% equity interest, exercisable from 1 July 2002. Deutsche Bahn
exercised its option to purchase the remaining 50.1% equity interest for 0.15 billion on
1 July 2002.
Holding in Ruhrgas AG
On 30 October 2001, the Group announced that it had reached agreement with E.ON
AG for the sale of the Group’s 23.6% stake in Bergemann GmbH, through which it held
an 8.2% stake in Ruhrgas AG. The transaction completed on 8 July 2002, realising
cash proceeds of €0.9 billion.
Japan Telecom
On 14 November 2003, Vodafone Holdings K.K. completed the disposal of its 100%
interest in Japan Telecom. The Group ceased consolidating the results of Japan
Telecom from 1 October 2003. Receipts resulting from this transaction were ¥257.9
billion (£1.4 billion), comprising ¥178.9 billion (£1.0 billion) of cash, ¥32.5 billion (£0.2
billion) of transferable redeemable preferred equity and ¥46.5 billion (£0.2 billion)
recoverable withholding tax, which was received during the 2005 financial year. In
October 2004, the preferred equity was sold to the original purchaser for ¥33.9 billion
(£0.2 billion).
Other disposals
During the 2004 financial year, the Group disposed of its interests in its associated
undertakings in Mexico, Grupo Iusacell, and India, RPG Cellular.
On 26 January 2005 the Group completed the disposal of a 16.9% stake in Vodafone
Egypt to Telecom Egypt, reducing the Group’s effective interest to 50.1%.