ETHL Communications, a subsidiary of conglomerate Essar Group, may soon sell its 10.97% stake in the Vodafone Essar joint venture after saying it will exercise its right to prepay outstanding bonds worth Rs42.3bn (US$939m), according to reports. The…
ETHL Communications, a subsidiary of conglomerate Essar Group, may soon sell its 10.97% stake in the Vodafone Essar joint venture after saying it will exercise its right to prepay outstanding bonds worth Rs42.3bn (US$939m), according to reports.
The bonds, which were reportedly sold in January 2010 in two tranches of Rs21.15bn (US$469m) and are maturing in July and December 2011, were backed by the 10.97% stake in the JV.
UK-based telecom giant Vodafone Group controls 67% of the venture, the rest of which is owned by Essar. A month ago, Vodafone and Essar respectively appointed Goldman Sachs and Standard Chartered to settle valuation issues with regards to their JV.
The UK company has the option to buy Essar’s entire stake by May this year. When the JV was formed in 2007, Essar was given a put option whereby it can either sell its stake to Vodafone for US$5bn or at a market price to be determined by independent assessment.
But Vodafone recently criticised plans by Essar to carry out a reverse listing of one of its wholly-owned telecom business because it may affect the value of their JV.
