The Hindu : Business : Hutch-Essar: differences over `RoFR'

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Saturday, Jan 06, 2007
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Hutch-Essar: differences over `RoFR'

HONG KONG/NEW DELHI: Hutchison Telecommunications International Ltd. (HTIL) on Friday said the Indian partner's consent for sale of equity in the mobile joint venture Hutch-Essar (HEL) was needed only if it was to certain telecom players in India and not for any deal with others.

In the midst of reports of differences between the two joint venture partners on the issue of `Right of First Refusal' (RoFR), the comment by HTIL assumes significance and may impact aspiring Indian companies, including Anil Ambani Group firm Reliance Communications.

A spokesperson for HTIL, which holds a majority 67 per cent stake in Hutch-Essar, told PTI that ``RoFR exists in the limited case of a sale (of equity in the venture) to certain Indian telecom companies.

"There is no RoFR over any other buyer.''

As per the shareholding agreement, the partners get a chance to buy out the other by matching the highest bid under the clause of RoFR.

However, the scope of RoFR is itself under dispute and Essar's top officials had visited HTIL headquarters in Hong Kong earlier this week to resolve the issue.

The statement by HTIL coincides with the India visit of officials of U.K. telecom giant Vodafone, the first entity to make public its intention to acquire HEL.

Asked about the HTIL statement, an Essar spokesperson told PTI that "we do not wish to comment on the shareholders' agreement.''

HTIL did not elaborate on RoFR and declined to comment on the discussions with the Essar Vice Chairman, Ravi Ruia, on Wednesday, but the position taken by it may lead to a legal tangle and possibly delay the process of sale of the Hong Kong-based company's stake in HEL, sources said. — PTI

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