British mobile giant Vodafone Group Plc is confident it can close its recent deal to buy a controlling stake in India's Hutchison Essar in the coming weeks, Chief Executive Arun Sarin said on Friday.
Sarin told an investors presentation that the approval for Vodafone's $11.1 billion acquisition from India's Foreign Investment promotion Board (FIPB) remained a few weeks away.
| Shareholders' agreement announced, Ravi Ruia on Vodafone Plc board. |
| The Ruias of Essar have acquired significant concessions from global telecom major Vodafone, even as it announced the much-debated shareholders’ agreement in New Delhi today. |
| These include a favourable put option, a seat for Ravi Ruia on the Vodafone global board, veto rights, a comprehensive right of first refusal (ROFR), and the promise to use Essar’s proposed national and international long-distance infrastructure as well as assets of Essar Infrastructure Ltd, a specialised telecom tower company. |
| With an eye on becoming the leading mobile player in the country – it is currently India’s fourth-largest mobile service provider – Vodafone-Essar has drawn up a $5 billion investment plan for the next two and a half years. Read more at Business Standard |
British giant Vodafone and Indian conglomerate Essar group on Thursday reached an agreement for jointly running India's fourth largest mobile firm - Hutch-Essar, which would be rechristened as Vodafone Essar.
The two companies said in a joint statement that they have agreed on partnership terms for Hutchison Essar, in which Vodafone is acquiring 67 per cent stake from Hong Kong's Hutchison Telecom International Ltd while Essar would continue to retain its 33 per cent stake.
"The partners have agreed that Hutchison Essar will be renamed Vodafone Essar and in due course the business will market its products and services under the Vodafone brand," it said.
Under the terms of the partnership, Vodafone will have operational control of Vodafone Essar and Essar will have rights consistent with its shareholding, including proportionate Board representation.
Ravi Ruia will be appointed as Chairman of Vodafone Essar and Arun Sarin will be Vice Chairman.
Read more at Financial Express
As a prelude to a new partnership agreement, senior Vodafone and Essar executives have held joint meetings with officials in the government, including the finance ministry.
The Vodafone team was led by Paul Donovan, chief executive officer (emerging markets). From Essar, vice-chairman Ravi Ruia, accompanied by Prashant Ruia and Rewant Ruia, attended.
Sources said things were moving towards a positive outcome for the Essars and the two sides were expected to “shake hands shortly.” In fact, the terms of the partnership agreement, including a four-year put option, are learnt to have been finalised and an announcement is likely in a couple of days.
A source familiar with the Vodafone-Essar negotiations said, “Things have been almost resolved between Essar and Vodafone. The meetings with government officials are partly aimed at providing them the information they had sought, as also to allay any misgivings.”
All three parties involved – Vodafone, Essar and Hutchison Telecom, which recently sold its stake to Vodafone – appear keen to resolve the issue and avoid legal complications and investigations.
These moves come after weeks of shadow boxing, including a recent petition in the Delhi High Court. The court, on a petition filed by Telecom Watchdog, directed the Foreign Investment Promotion Board to complete its enquiry into the Hutch-Essar shareholding within two months.
