The Hindu Business Line : Vodafone starts due diligence of Hutch

Even as the UK-based Vodafone started its due diligence of Hutchison Essar Ltd, there were conflicting reports on almost every other contender for the wireless company.

Vodafone officials who are in the country, stationed in both New Delhi and Mumbai, have started scrutinising the books of Hutch-Essar, said sources close to the development.

It would take the officials a week to 10 days to complete the due diligence, said the sources.

But there was a cloud over some of the other contenders — namely Reliance Communications and Maxis Communications — as well as over the Essar Group, currently 33 per cent stakeholder in Hutch-Essar.

Reports have it that RCom had not been allowed access to Hutch-Essar's books; however, some other sources close to the developments said that blocking out any contender would be imprudent for Hutch if it wanted to discover the highest valuation for itself.

RCom spokespersons declined comment on the matter.

On the Essar front, the Chairman, Mr Shashi Ruia, was reported to have made the first public statement from the group on the matter, that the Essars were interested in buying out Hutch's 67 per cent stake in the joint venture.

But the debate on the nature of the Essars' first right of refusal of a stake sale by Hutch continued. Did the Essars indeed have such a right over all buyers, both domestic and international? Or did the first right of refusal pertain only to some Indian buyers, and under certain conditions only? Also, should this debate over the first right of refusal escalate and end up in the courts, then would the sell-off be stalled and for how long?

There were also no clear indications of whether the Malaysia-based Maxis Communications is still in the race for Hutch-Essar or not.

Another contender for Hutch-Essar is the Hinduja Group, which made public its interest last week, but there was no indication of their having embarked on a due-diligence exercise.

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