BUSINESS

Sarin meets PM

Hopes to sign agreement with Essar soon

Vodafone would discuss its investment plans with EssarHopes Essar would remain a partner in the mobile venture

NEW DELHI: Vodafone CEO Arun Sarin on Friday apprised Prime Minister Manmohan Singh of plans for rural expansion of Hutch-Essar, in which his group is set to acquire a majority stake, and exuded confidence over signing a shareholder agreement with the Essar group.

Mr. Sarin called on Dr. Singh before flying back to London in his own jet to round off his three-day visit to India, within days of clinching the deal with Hong Kong's Hutchison Telecom for a controlling stake in Hutch-Essar.

Emerging from the Prime Minister's residence, he told reporters that he was convinced that Essar would remain a partner in the mobile venture.

Earlier, in a statement on Thursday, following Mr. Sarin's meeting with Essar Chairman Shashi Ruia, Vice Chairman Ravi Ruia and other directors, the Indian conglomerate had said it would take a decision on its position in due course.

"We will ensure that all of our shareholder rights, including under our shareholders' agreement with Hutchison, are adhered to,'' the group had said.

Mr. Sarin said Vodafone would discuss its investment plans with Essar, adding that "a shareholders agreement with Essar will be hopefully signed soon''.

Mr. Sarin has already committed to invest $2 billion in a "couple of years'' for expansion of Hutch-Essar in India as part of efforts to become the country's largest mobile operator with a target of 100 million subscribers.

"I am coming soon, I hope,'' Mr. Sarin said after meeting the Prime Minister. "There is still some work to be done and we will do that work in the coming weeks.''

"I am going back with the very positive feeling that we are working together... they are the founding partners in this venture... I would very much like them to continue,'' Mr. Sarin said.

Essar, which had earlier taken objection to Vodafone's unilateral announcement of its intention to share infrastructure with rival Bharti Airtel even before fructification of the deal with HTIL, is keeping open all its options, including a Right of First Refusal.

Amid speculation that Essar might be taking a hard line to bargain for a premium from Vodafone for exiting the venture, where it has 33 per cent stake, the British giant had made it clear that it would not sweeten its offer, which would be the same as that made for HTIL's controlling stake.

Quoting legal opinion, Mr. Sarin had asserted that when it came to Vodafone, Essar did not have a Right of First Refusal to enable it to match the top bid. Sources in the know, however, said Essar was still holding on to the RoFR clause.

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