Essar group plans to monetise its 33 per cent stake in Hutchison-Essar, its joint venture with UK’s Vodafone, to raise around $4.5 billion (Rs 18,000 crore) for overseas acquisitions. This will be the largest fund-raising through share monetisation by an Indian company.
The group recently bought two steel plants in Canada and the US for $3.2 billion and committed $4 billion in Egypt to set up a refinery and steel plants. It is hunting for more global assets.
Sources close to the development said the group has appointed banks to advise it on assigning its one-third stake in India’s fourth-largest mobile service provider.
The attempt also reflects the buoyancy in the domestic telecom industry. “It shows that the Essar group is certain about the rising valuation of its holding in Hutchison-Essar before it exercises its put option,” the banker added.
On the basis of the acquisition cost paid by Vodafone, which recently acquired Hong Kong-based Hutchison’s 52 per cent stake, Essar’s holding in Hutchison-Essar is valued at $5.46 billion.
Read more in The Business Standard article.
Showing posts with label Hutchison. Show all posts
Showing posts with label Hutchison. Show all posts
Tuesday, May 29, 2007
Saturday, May 5, 2007
Deal clinched: Vodafone gets all-clear call from FM
Vodafone cleared its last hurdle in acquiring a controlling stake in Hutch Essar with finance minister P Chidambaram giving his go-ahead on Friday. His approval comes within a week of the Foreign Investment Promotion Board giving its nod for the acquisition.
The FM’s approval should pave the way for Vodafone to secure management control of HEL and for the company to be renamed Vodafone Essar. Sources said as a first step, Vodafone will now be able to constitute a new 12-member board to oversee the operations of the company. Essar vice-chairman Ravi Ruia will be the chairman of Vodafone Essar and Vodafone chairman Arun Sarin will be the vice-chairman. Max India chairman Analjit Singh and HEL MD Asim Ghosh will also be on the board.
The approval comes as a welcome reprieve to Mr Singh and Mr Ghosh, whose 12.26% shareholding in HEL has been under scrutiny since the deal was announced in February.
The Vodafone-HEL regulatory saga, which saw the proposal being deferred thrice by FIPB, began in February soon after Vodafone announced it had agreed to acquire companies that controlled 67% in HEL from Hutchison Telecom for $11.1 billion. This had given rise to a controversy about whether the 15% held by Mr Singh, Mr Ghosh and IDFC should be counted as FDI.
Read more in The Economic times article.
The FM’s approval should pave the way for Vodafone to secure management control of HEL and for the company to be renamed Vodafone Essar. Sources said as a first step, Vodafone will now be able to constitute a new 12-member board to oversee the operations of the company. Essar vice-chairman Ravi Ruia will be the chairman of Vodafone Essar and Vodafone chairman Arun Sarin will be the vice-chairman. Max India chairman Analjit Singh and HEL MD Asim Ghosh will also be on the board.
The approval comes as a welcome reprieve to Mr Singh and Mr Ghosh, whose 12.26% shareholding in HEL has been under scrutiny since the deal was announced in February.
The Vodafone-HEL regulatory saga, which saw the proposal being deferred thrice by FIPB, began in February soon after Vodafone announced it had agreed to acquire companies that controlled 67% in HEL from Hutchison Telecom for $11.1 billion. This had given rise to a controversy about whether the 15% held by Mr Singh, Mr Ghosh and IDFC should be counted as FDI.
Read more in The Economic times article.
Thursday, April 12, 2007
India breaks into top 10 M&A league
India became the world’s eighth largest market in the first quarter of 2007 — an improvement over the 11th rank in calendar year 2006. According to Alan S Alpert, managing partner (M&A transaction services), Deloitte Tax LLP, there has been a substantial increase in M&A in India. Inbound M&A (into India) and local M&A have been growing.
The Vodafone Hutch accounted for the majority of the gains in the first quarter. Also the number of M&A transactions by Indian companies overseas has gone up substantially. The US and the UK continues to be the number one and two M&A market. According to Thomson Financial, in the first quarter India saw inbound and local deals of $25.581 billion.
In the first quarter India pipped markets like France (2006: $76.8 billion, 2007: $24.79 billion), Italy (2006: $17.40 billion, 2007: $14.79 billion), Luxembourg (2006: $34.65 billion, 2007: $2.5 billion). According to Mr Alpert, India has now surpassed China and South Korea in the Asian M&A league table and is behind only behind Japan.
He added that the global M&A saw record levels of deals worth $3.7 trillion in 2006. However, there has been a shift in the participants in the M&A market. Around three to four years ago private equity players contributed to around 10% of the deals. In 2006 however, this has now changed to 25%. PEs have been gaining force on the back of liquidity and a stable economy.
That could be the reason why players like Deloitte have launched a dedicated private equity practice here — Deloitte Corporate Finance Services India. The team in India is led by managing director Sandeep Gill and director Bomal Modi. Both were earlier part of the corporate finance practice of Deloitte & Touche LLP In London.
The Vodafone Hutch accounted for the majority of the gains in the first quarter. Also the number of M&A transactions by Indian companies overseas has gone up substantially. The US and the UK continues to be the number one and two M&A market. According to Thomson Financial, in the first quarter India saw inbound and local deals of $25.581 billion.
In the first quarter India pipped markets like France (2006: $76.8 billion, 2007: $24.79 billion), Italy (2006: $17.40 billion, 2007: $14.79 billion), Luxembourg (2006: $34.65 billion, 2007: $2.5 billion). According to Mr Alpert, India has now surpassed China and South Korea in the Asian M&A league table and is behind only behind Japan.
He added that the global M&A saw record levels of deals worth $3.7 trillion in 2006. However, there has been a shift in the participants in the M&A market. Around three to four years ago private equity players contributed to around 10% of the deals. In 2006 however, this has now changed to 25%. PEs have been gaining force on the back of liquidity and a stable economy.
That could be the reason why players like Deloitte have launched a dedicated private equity practice here — Deloitte Corporate Finance Services India. The team in India is led by managing director Sandeep Gill and director Bomal Modi. Both were earlier part of the corporate finance practice of Deloitte & Touche LLP In London.
Wednesday, April 11, 2007
Ghosh, Singh can modify deal with Vodafone
Hutchison Telecom International (HTIL) and Vodafone have worked out a revised deal with Max India chairman Analjit Singh and Hutchison Essar (HEL) CEO Asim Ghosh on the valuation of their holdings in HEL.
As per the deal, which has been communicated to the government, the shares of Mr Singh and Mr Ghosh have been valued at a minimum of $226.25 million and $164.51 million, respectively, subject to HEL’s equity valuation being $25 billion or less.
In case the valuation of Hutchison Essar crosses $25 billion at the time the options on these shares are exercised, the value of these shares will be calculated on the basis of a pre-agreed formula devised by Goldman Sachs.
Mr Singh’s investment company is called ND Callus while Mr Ghosh’s investment company is known as Centrino.
It is also understood that Mr Singh and Mr Ghosh may work out a modified agreement with Vodafone. The put option for Mr Singh and Mr Ghosh may become exercisable after five years instead of 10 years envisaged in the original agreement with HTIL. However this could not be confirmed, and sources close to one of them denied this.
Read more in The Economic Times article.
As per the deal, which has been communicated to the government, the shares of Mr Singh and Mr Ghosh have been valued at a minimum of $226.25 million and $164.51 million, respectively, subject to HEL’s equity valuation being $25 billion or less.
In case the valuation of Hutchison Essar crosses $25 billion at the time the options on these shares are exercised, the value of these shares will be calculated on the basis of a pre-agreed formula devised by Goldman Sachs.
Mr Singh’s investment company is called ND Callus while Mr Ghosh’s investment company is known as Centrino.
It is also understood that Mr Singh and Mr Ghosh may work out a modified agreement with Vodafone. The put option for Mr Singh and Mr Ghosh may become exercisable after five years instead of 10 years envisaged in the original agreement with HTIL. However this could not be confirmed, and sources close to one of them denied this.
Read more in The Economic Times article.
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