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HTIL seeks legal insurance in India

Hutchison Telecommunications International (HTIL) is understood to have obtained a ‘caveat’ from the Bombay High Court, allowing it to better fight any attempt by the Essar Group to derail the sale of a controlling stake in Hutchison Essar to Vodafone.

The caveat essentially ensures HTIL is made party to any attempt by the Essar Group to exercise its claimed first right of refusal over the sale of HTIL’s 67 per cent stake in the Indian operator.

The Essar Group’s first right of refusal is a much debated option that could allow Essar to buy the 67 per cent stake from HTIL at the same price offered by Vodafone.

The move by HTIL is thought to be a failsafe that would only come into effect if a satisfactory agreement could not be reached by Vodafone and 33 per cent Hutch Essar stakeholder, the Essar Group.

Earlier this month it emerged that India’s Essar Group wants to run mobile operator Hutchison Essar in a partnership of equals with Vodafone.

The Indian conglomerate issued a statement in which it said it sees Hutch Essar “as a core part of its business portfolio for the long term” and “has no intent to exit the company”.

Essar has confirmed that Vodafone has approached the group with regards to a possible partnership over the running of the company and some local press reports state that Essar is open to increasing its existing stake beyond 33 per cent to run the operator on an equal footing with Vodafone.

HTIL’s shareholders will vote on Vodafone’s offer to buy out the Hong Kong company’s stake for $11.1bn on March 9.

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