The Essar Group on Thursday said it has not taken a decision yet to exercise the option to sell its 33 per cent stake in the telecom joint venture with Vodafone and has time till May 2011 to make the move.

“We have time until May 2011 to decide on that (put option),” Prashant Ruia, Vice Chairman of Essar Energy, told reporters here.

He did not rule out the possibility of an IPO for selling Essar’s stake in the joint venture with UK-based telecom giant Vodafone. Essar’s 33 per cent stake in the joint venture is valued at about $5 billion.

Under the 2007 shareholders agreement between the two companies, Essar has a put option of divesting its stake in the Vodafone Essar telecom venture.

Although the put option expires in May 2011, Essar has to exercise it within a one-year window, which opened on May 8, 2010.

On reports that Essar may come out with an initial public offer to offload the stake, Mr. Ruia said “it is one of the options and that is under preliminary discussions.”

Asked as to when might the company go for the IPO, in case it decides to do so, Mr. Ruia said “it was too early and we cannot comment on that.”

Last week, Vodafone had agreed to pay Rs. 3,400 crore to the Essar group, over and above the fair market price, if the company exercises the option of selling all or part of its stake in the joint venture.

This amount, however, is payable in the event that the Essar group exercises its put option to sell some or all of its Vodafone Essar Ltd. shares at a fair market value, provided that the maximum aggregate amount does not exceed $5 billion.

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