Tags: Reliance, Vodafone

Essar expected to offer 14 billion dollars to buy out stake in Hutch

Essar is being said to be considering offering 14 billion dollars to buy out majority shareholder Hutchison Telecommunications in the Hutchison Essar Company.

Hutch is the fourth largest mobile service provided in India which is one of the fastest growing mobile markets in the world.

The Essar Group is currently waiting for other contenders including Vodafone and Reliance to submit their own bids for this stake.

The Indian newspaper Economic Times quoted an unnamed source as saying: “The Essar Group prefers to buy out Hutch’s stake in Hutch Essar and has valued the company at 21 to 22 billion dollars.”

The report further said: “For this, it is looking at borrowing about 13 billion dollars — the financing pledges it has received (are) far in excess of this requirement.”

Hutch is 67-percent owned by Hong Kong-based Hutchison Whampoa. Essar being an existing shareholder in the company has first right of refusal to buy Hutchison Telecom’s stake in Hutchison Essar.