Hutchison Essar is now Vodafone Essar
The Vodafone Essar agreement is now official. Hutchison Essar is now Vodafone Essar. Eventually, the business will market products and services under the Vodafone brand.
Under the terms of the partnership signed between Vodafone and the Essar Group, announced in a release issued to the London Stock Exchange earlier today, Vodafone will have operational control of Vodafone Essar, and Essar will have rights consistent with its shareholding including proportionate board representation. Ravi Ruia will be appointed by Vodafone as chairman of Vodafone Essar, and Arun Sarin will be appointed by Essar as vice-chairman.
Essar will have certain liquidity rights including, between the third and fourth anniversaries of completion, and subject to regulatory requirements, an option to sell its 33% shareholding in Vodafone Essar to Vodafone for $5 billion or an option to sell between $1-5 billion worth of Vodafone Essar shares to Vodafone at an independently appraised fair market trading value.
This follows Vodafone’s announcement on 11 February 2007 that it had agreed to acquire Hutchison Telecommunications International Limited’s (HTIL) controlling interest in Hutchison Essar in which Essar is and will continue to be 33% shareholder.
Commenting on the new partnership, Arun Sarin, chief executive, Vodafone, said: “I am delighted that Essar and Vodafone have agreed the terms of an on-going partnership. Essar has played a key role in transforming this business into a leading Indian mobile operator. We look forward to leveraging this experience and working with our partner as the company enters its next phase of growth in the attractive Indian telecommunications market. We will be bringing the relevant range of Vodafone products and services to the Indian consumer.”
Ravi Ruia, vice chairman, Essar, added: “It is terrific that we are joining with the world’s leading international mobile company. I welcome them as our partner into this successful business, which we will now take forward to the next level. Essar was a founding partner in Hutchison Essar and played an active role in building the company, including extending network coverage into several profitable regional markets. By partnering with Vodafone we expect to create further value in the business.”
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