The Ruias of Essar group are poised to acquire Hong Kong-based Distacom's 20% stake in Hutchison Max Telecom in an all-cash deal. For the moment, the Essar-Distacom deal size is shrouded in secrecy.
Acquisition of Distacom's minority stake in Hutchison Max Telecom (Hutchison's Mumbai cellular operation) will go a long way in freezing Essar's final post-merger holding in the consolidated Hutchison entity in India. But there is no decision yet on Essar's earlier plans to also buy into Max India group's 10% in Hutchison Max Telecom.
With the Hutch-Essar consolidation bid awaiting Foreign Investment Promotion Board (FIPB) clearance, there's a complete information blackout on all queries linked to post-merger holdings.
When contacted, Essar group officials declined to comment on the Distacom deal. "I cannot comment on any shareholder-level matters or stake acquisitions till the FIPB issues statutory clearances for consolidation of all Hutchison-Essar telecom interests in India," Vikas Saraf, CEO, Essar Tele-Holdings (ETHL), told ET. ETHL is the telecom investment arm of the Essar group.
However, Mr Saraf confirmed the merged entity will bear the Hutchison-Essar nameplate. "After consolidation, the merged entity will be renamed Hutchison-Essar prior to the IPO scheduled before December '04. This is in line with the original plan," Mr Saraf said.
Remember, Hutchison Max Telecom filed an application with FIPB on June 14 to consolidate all Hutchison telecom interests in India under a single corporate entity. The FIPB clearance to transfer shares of existing Hutch affiliates - Hutchison Essar Telecom, Hutchison Telecom East, Hutch-Essar South, Fascel and Aircell Digilink - to Hutchison Max Telecom is expected over the next four to six weeks.
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