A group of Vodafone shareholders are increasing the pressure on the company to spin off its 45% stake in the second largest US cellular operator, Verizon Wireless. Activist shareholder group Efficient Capital Structures (ECS) has put forward a resolution for Vodafone’s annual general meeting on 24 July which would see the Verizon stake spun off into a listed security, Dow Jones reports. The group says that Vodafone is not deriving the full value from its interest in Verizon Wireless. ‘Verizon Wireless has been a cash drain for Vodafone, a situation forecast to continue for another eight years unless agreement is reached with [55% shareholder] Verizon Communications,’ ECS said in a statement.
ECS claims that a ‘stand-off’ over tax distribution between Vodafone and its US partner is the reason behind the lack of dividend payments. Verizon says that a spin-off of its interest in Verizon Wireless would not improve the tax situation, but ECS rejects this claim, saying the move would save GBP600 million a year in tax payments. ECS shares represent just 0.0004% of Vodafone’s issued stock.