The Hindu Business Line : Max Telecom exits Hutchison Essar — Divests 3.16-pc stake in Rs 657-cr deal

MAX Telecom Ventures Ltd, a subsidiary of Max India, has divested its entire 3.16 per cent stake in Hutchison Essar Telecom to Essar Teleholdings Ltd in an all-cash deal aggregating Rs 657 crore at a sale price of Rs 607 per share.

Since Max India Ltd holds 60.8 per cent stake in Max Telecom Ventures and the remaining 39.2 is held by IL&FS Trust Company Ltd, the former will get about Rs 400 crore from the total sale proceeds.

In a statement, Mr B. Anantharaman, Joint Managing Director, Max India, said the divestment of this stake was a strategic decision and would mark a complete exit of Max India from the telecom sector.

"Hutchison Essar Telecom has created tremendous value for its stakeholders. By exiting the investment, Max Telecom has optimised value creation for its shareholders. Max India takes great pride having created a fundamentally strong telecom business in Mumbai, which now forms the backbone of Hutchison Essar Telecom," he said.

According to company officials, a portion of the proceeds will be used to retire Max India's debt, which stands at Rs 90 crore. The remaining will be invested in expanding its core businesses of healthcare and insurance.

An Essar spokesperson said, "We have signed an MoU with Max and this deal is subject to all necessary approvals. Post this acquisition, we will have 33.58 per cent stake in the Hutchinson Essar."

This move follows a strategy by Essar-Hutchison to consolidate their telecom businesses across the country under a single holding company. In July, Essar bought out the 3.43-per cent stake held by Usha Martin for Rs 267 crore, besides acquiring the cellular business of BPL Mobile for over a $1 billion. Kotak Group, Hindujas and the Hutchison Whampoa are the other stakeholders in the company.

Hutchison Essar has over 12 million mobile users across India.

Even as the Bombay Stock Exchange fell by 80.37 points, the Max India share on Tuesday rose 2.97 per cent to close at Rs 566.

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