The Hindu : Business : Essar interested in Hutch buy-out

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Tuesday, Jan 09, 2007
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Essar interested in Hutch buy-out

Vodafone starts due diligence

NEW DELHI/MUMBAI: Essar on Monday announced it was interested in buying out its foreign partner in Hutch-Essar, coinciding with U.K.'s telecom giant Vodafone commencing due diligence for acquiring India's fourth largest mobile player.

``Yes, we are interested in Hutch. That is our company,'' Essar Group Chairman Shashi Ruia told reporters.

Asked if Essar needed to study the books (due diligence), he retorted: "`Why should I do due diligence? It is our company.''

Essar by virtue of its 33 per cent stake in Hutch Essar Ltd. (HEL) has three directors on the joint venture company's board and, thus, access to all operational, infrastructural and financial information about the joint venture.

Mr. Ruia's announcement came within hours of a 20-member Vodafone team meeting HEL officials to start the process of due diligence, for which it is taking support from audit firm Ernst & Young and advisor UBS.

When asked about the due diligence process having started, a Vodafone spokesperson declined to comment "at this point in time.''

Meanwhile, a spokesperson of HTIL, which has a 67 per cent stake, told PTI that "We do not comment on the state of negotiations.''

Meanwhile, the European Union pitched for Vodafone in its bid to acquire HEL, with EU Trade Commissioner Peter Mandelson taking up the matter with Commerce and Industry Minister Kamal Nath.

Vodafone CEO Arun Sarin is tipped to visit India during the due diligence process on January 10. But the Vodafone spokesperson in London neither confirmed nor denied media reports to this effect. — PTI

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