The Hindu Business Line : Vodafone officials meet DoT; Hindujas in Hutch fray

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Hinduja Group has made it clear they were unlikely to settle for anything less than 51 pc.
Open to partnering with either Essar or Vodafone.

New Delhi , Jan. 4

In an indication of an imminent deal with Hutch, Vodafone executives on Thursday met senior officials in the Department of Telecom to understand the regulatory issues that surround the Government's mergers and acquisition guidelines, if it were to acquire Hutch's stake in India.

While DoT sources said that the meeting did not touch upon the issue of Hutchison Essar, industry sources said that Vodafone may have sought clarity with regard to the Government's FDI policy for the telecom sector, which is yet to be formalised. The other issue that could be in the way for Vodafone is its 10 per cent holding in Bharti Airtel. As per DoT norms, no single company can have more than 10 per cent stake in two different cellular operators in the same circle.

In another significant development that will intensify the war for Hutchison Essar, the Hinduja Group has also thrown in its hat for acquiring the cellular company.

But they made it clear they were unlikely to settle for anything less than 51 per cent of the country's fourth-largest mobile company. "We have expressed our intention to Hutchison and we are waiting for confirmation whether they want to sell the stake," said Mr Ashok Hinduja, Executive Chairman, Hinduja Group.

Hinduja is the sixth company to show interest in Hutchison Essar after the Hong Kong-based Hutchison Whampoa said that it was prepared to sell out if it got the right price.

The other companies in the fray are Reliance Communications, the Essar Group, Vodafone, Maxis and Orascom.

Reliance Communications has called for a board meeting on January 10 to discuss fund raising. Vodafone is understood to be looking at a three-way split of the mobile company between itself, Essar Group and Mr Analjit Singh, Chairman, Max Group. Essar and Mr Singh now own 33 per cent and 7.4 per cent stake, respectively, in Hutchison Essar. Mr Analjit Singh was unavailable for comment.

Maxis and Orascom have not yet officially made known their position on the deal, while Essar is the only company that has made a financial bid to buy out Hutch's share.

The move from Hindujas indicates that the company wants to make a comeback into the telecom sector.

In June 2006, Hindujas had sold off their 5.1 per cent stake in Hutchison Essar to Hutchison Telecom International Ltd for $450 million (around Rs 2,000 crore).

Mr Prabal Banerji, Group President (Finance) and CFO, Hinduja Group, told Business Line that the group was open to partnering Essar or Vodafone as long as it gets 51 per cent stake.

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