The Hindu Business Line : Reliance Comm in race for Hutch-Essar

Its Chairman, Mr Anil Ambani, said his company has "committed and exclusive financial support" from leading international banks and financial institutions to acquire Hutchison-Essar."

"Frankly, we have lost count of how many private equity players have lined up behind us," said Mr Ambani, at a news conference today. "The vast majority of the top 10 players are with us."

This is the first public statement on the company's interest in Hutch-Essar.

"RCom, as part of its overall growth strategy, is continuously examining several organic and inorganic growth opportunities. Hutch-Essar is one such situation," said Mr Ambani. "A potential combination of this nature could create compelling value for all shareholders of RCom."

The UK-based Vodafone Group Plc is the only other suitor who has made public its intention to buy Hutch-Essar.

Although sources close to the Essar group have said that they are also bidding for Hutch's 67 per cent stake and have lines of credit ready, there has been no public statement so far from the group.

Private equity players not just bring credit, they can also provide debt, and syndicate debt, he said.

`Excess credit'

He described the credit available to RCom as "mind-boggling". It is "far in excess of what we can ever consume," he said, but would neither elaborate on the quantum of credit available, nor on his group's valuation of Hutch-Essar.

In a competitive situation, one cannot share numbers, he said, referring to the numbers doing the rounds as "speculative."

Mr Ambani also said that in-country consolidation creates the highest synergies and value creation for the stakeholders. (Analysts interpreted it as a suggestion that RCom would be a better suitor for Hutch-Essar than a foreign player.)

Reliance has been looking to enhance its operations in the GSM space and Hutch-Essar fits in very well with this strategy. At the same time, organic growth in the GSM sector was still an option for the group, said Mr Ambani.

Analysts said they see today's announcement as a signal from the Anil Ambani group that they have the financial backing ready for a possible buyout. "How an Indian group will manage to compete with Vodafone, and manage to raise funds of the magnitude of Rs 40,000-Rs 50,000 crore has been keeping many an analyst's mind busy," said one of them.

On the possibility of their working with the Essar group, Mr Ambani said: We cannot comment on a hypothetical situation." But he said that the partners (Hutch and Essar) would have to work out things first before a third party could step in for acquisition.

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