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Hutch approaches HC against Essar
By agencies
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Wednesday, 02 August 2006, 19:30 IST
MUMBAI: Hutch has approached Bombay High Court against a termination notice terming it as "unlawful", issued by its joint venture partner Essar over the merger of BPL Mobile (Mumbai area) into Hutchison Essar.
The matter would now be fought in the High court, both Hutch and Essar officials individually confirmed. Following the termination notice, Essar had decided not to sell the BPL cellular business in Mumbai, the most lucrative metro circle, to Hutch Essar, a company in which it holds about 33 percent stake.
Essar had bought BPL Mobile at an enterprise value of $1.1 billion last year. The deal was later extended to Hutchison Essar for the eventual merger into the JV. The deal for three circles, Maharashtra and Goa, Tamil Nadu and Pondicherry and Kerala concluded in January, while the merger in Mumbai was pending for the last ten months.
An Essar official informed media that either party could terminate the agreement, in case it was not approved by the due date (July 31), which is exactly what they did.
On their part, Hutch officials decided not to disclose the plea under which they had moved court against the notice, saying the matter was now subjudiced.
The relationship between both the partners Hutchison and Essar is already in murky waters. The decision of Hutchison to bring Egyptian mobile operator 'Orascom', into the Board of Hutchison Essar, added fuel to fire.
Essar opposed the entry of the company into the board of through an indirect 19 percent stake, citing security reasons. Before the issue is settled in Court, Essar has actively started looking for partners to sell BPL Mobile, according to sources.