Vodafone Group, which recently acquired control of Indian mobile operator Hutch-Essar for 10.9 billion dollars, has received a call from an influential activist investor lobby to consider a restructuring proposal that could unlock up to 75 billion dollars for its investors.
While acknowledging the receipt of the letter from Efficient Capital Structures (ECS), India-born Arun Sarin-led Vodafone said in a regulatory filing on Thursday that it was reviewing the cotents of the letter and would make an announcement in due course.
ECS, backed by another investment group and former Marconi Finance Director John Mayo-run investment fund Beehive Capital, is asking Vodafone to submit a number of resolutions at the company's AGM on July 24 concerning the potential restructuring options for the company.
The activist fund said separately in a statement: "We believe Vodafone is undervalued because it has an inefficient capital structure. Its most valuable asset is a passive, minority share and its balance sheet is under-geared." The resolutions are designed to put this right and if implemented could release between 17-38 billion pounds of value to shareholders, ECS Chairman Glenn Cooper said.
The fund has also established a website Vote4Value to garner support of Vodafone shareholders for its proposals.
"Our site is designed to help fellow shareholders and American Depository Receipt (ADR) holders of Vodafone Group Plc to understand our proposals and why they should vote in favour the resolutions at Vodafone's AGM on July 24," it said.
Vodafone shares moved higher in early morning trade following the disclosure of the proposals made by the fund. It was trading 3.5 pence higher at 158.5 pence.