Vodafone to sell Japanese fixed line subsidiary

Vodafone Group Plc has announced that its 66.7% indirectly owned subsidiary Japan Telecom Holdings Co, Ltd. has agreed to the leveraged acquisition of its 100% owned fixed line business, Japan Telecom Co, Ltd., by an affiliate of RHJ Industrial Partners, a Ripplewood Holdings LLC fund dedicated to making investments in Japan.

As a result of the transaction, Japan Telecom Holdings will receive ¥261.3bn (€2.07bn) as follows: - ¥228.8bn (€1.76bn) of cash; and - ¥32.5bn (€0.25bn) of redeemable preferred equity.

The enterprise value of Japan Telecom is expected to be approximately ¥262bn (€2.02bn) in early October 2003. The cash received will be used to reduce Vodafone's consolidated net debt.

Japan Telecom Holdings intends to retain the redeemable preferred equity, which is transferable, at least until July 2004.

Subject to the fulfillment of certain conditions, the transaction is expected to close in the final quarter of calendar year 2003.

Vodafone expects to cease consolidating Japan Telecom once the definitive agreements relating to the bank financing are signed, which is expected

to occur in early October.

UBS Investment Bank acted as sole financial adviser to Vodafone and Japan Telecom Holdings on this transaction.