Vodafone restructure will save £600m in tax
Rebel shareholders' proposal for restructuring could slash Vodafone's tax bill by adding debt to the balance sheet
The radical restructuring of mobile giant Vodafone, proposed by rebel
shareholder Efficient Capital Structures (ECS), could save the group as much as
£600m in tax.
ECS proposes that Vodafone should issue £34bn in bonds, and then claim tax
relief on the coupon payments on those bonds.
The proposal has successfully been put forward for a vote at the Vodafone
AGM, but the board has rejected the suggestion, arguing that the move will see
Vodafone choke on too much debt.
‘What’s being proposed is loading debt up to the sort of level that got
France Telecom and Deutsche Telekom into the most appalling pickle,’ Vodafone
told the Sunday Times.