Vodafone’s Colao Sees Verizon Solution By End 2011

Vodafone Group Plc, which hasn’t received a dividend from its Verizon Wireless joint venture since 2005, expects a solution in the U.S. by the end of 2011, Chief Executive Officer Vittorio Colao said today.

“I think it is fairly logical to assume that by the end of next year something should happen,” Colao said at a Morgan Stanley conference in Barcelona. “There’s a clear intent to work well together. We keep our mind open. If it’s impossible to get cash out of it, we should go for other solutions which are not very advantageous to our shareholders and the company.”

The CEO is reviewing Vodafone’s 45 percent stake in the unit, as partner Verizon Communications Inc. focuses on paying down debt. Colao said last week he expected dividends from the unit “at some point in the future.” Verizon Wireless had net debt of $14.3 billion at the end of September, and generates annual free cash flow of about $12.5 billion.

Colao, a former McKinsey & Co. partner, has said he’s reviewing all minority interests amid pressure from shareholders to squeeze more out of the investments. Newbury, U.K.-based Vodafone this year placed its minority holdings into a separate unit directly managed by Colao and Chief Financial Officer Andrew Halford.

Photographer: Chris Ratcliffe/Bloomberg

Vittorio Colao, chief executive officer for Vodafone Group Plc. Close

Vittorio Colao, chief executive officer for Vodafone Group Plc.

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Photographer: Chris Ratcliffe/Bloomberg

Vittorio Colao, chief executive officer for Vodafone Group Plc.

Shares Rise

Vodafone shares rose as much as 1.8 percent to 169.9 pence in London and traded at 168.75 pence at 11:19 a.m. The stock has gained 17 percent so far this year.

Vodafone is reviewing its stake in French mobile-phone company SFR and considering a sale of its holding in Polkomtel SA, Poland’s biggest mobile-phone operator.

In the last few months, Vodafone sold holdings in Japanese wireless operator Softbank Corp. for 3.1 billion pounds ($5 billion) and disposed of its stake in China Mobile Ltd. for $6.5 billion in the biggest divestment since Colao took charge.

To contact the editor responsible for this story: Jonathan Browning at jbrowning9@bloomberg.net

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