Essar arranges financing for proposed Hutchison buyout

2 Jan 2007

India’s Essar Group is reported to have arranged financing to launch a bid for the 66.99% of its mobile joint venture with Hong Kong’s Hutchison Telecommunications International (HTIL) that it does not already own. Essar has lined up Morgan Stanley, Standard Chartered, Lehman Brothers and Citigroup to lead arrange the funding for a possible takeover of Hutchison Essar Ltd, India’s fourth largest mobile operator, the FT reports, quoting people familiar with the matter. Other potential bidders for HTIL’s 33.01% stake in Hutchison Essar Ltd include the UK’s Vodafone Group and India’s Reliance Communications. The FT reported last week that Essar had valued HTIL’s stake at USD11 billion, valuing the whole company at around USD16.4 billion, compared to an offer from Vodafone valuing the cellco closer to USD18 billion. Hutchison Essar Ltd offers GSM services in India under the Hutch brand and via a number of subsidiary companies, including Hutchison Essar Telecom (HET), Hutchison Max, Essar Spacetel, Fascel and BPL Mobile. It had a 16.45% share of the Indian mobile market at the end of September 2006.

Last week the Indian press linked Qatar Telecom and Egypt’s Orascom with a possible joint bid for a stake in Hutchison Essar; Malaysia’s Maxis Communications is among other telcos to have reportedly shown interest.

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