The Hindu Business Line : Reliance Comm to raise funds for Hutch-Essar buy

Reliance Communications said that its board on Wednesday approved the raising of funds for pursuing the company's interest in acquiring Hutchison-Essar Ltd.

"The board reaffirmed its interest in the potential opportunity relating to the business of Hutchison Essar Ltd (HEL). The board authorised RCom Chairman, Mr Anil Dhirubhai Ambani, to take all necessary steps for this purpose, including raising long term resources in the form of External Commercial Borrowings (ECBs) and so on, as may be appropriate," said a statement from the company.

The board also noted that there is no certainty either on the completion or the timing of the said proposal, said the statement. According to sources, the meeting mainly focussed on the Hutch-Essar issue.

Mr Anil Ambani, at a news conference some weeks ago, had said that his company had the backing of a majority of the top 10 international financial institutions and private equity entities.

The UK-based Vodafone has already started the due diligence process on Hutch-Essar. Other potential bidders will have to arrange their lines of finance to better the Vodafone offer, whatever that may be, said analysts.

Also approved at the RCom board meeting was issuance of foreign currency convertible bonds (FCCBs) in the international markets, in one or more tranches, up to $1 billion or its equivalent, at a premium to the market price of the equity shares of the company.

The board also gave its approval on the Implementation of the Employee Stock Option Scheme (ESOS) and constituted an ESOS Compensation Committee of independent directors of the company for administering the ESOS.

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