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RCom board give green signal to raise funds for Hutch-Essar bid
By siliconindia
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Thursday, 11 January 2007, 18:30 IST
Mumbai: Reliance Communications has announced of its board approval to raise funds for pursuing the acquisition of Hutchison-Essar Ltd.
"The board reaffirmed its interest in the potential opportunity relating to the business of Hutchison Essar Ltd (HEL). The board authorized RCom Chairman, Anil D. Ambani, to take all necessary steps for this purpose, including raising long term resources in the form of External Commercial Borrowings (ECBs) and so on, as may be appropriate," said a statement issued by the company.
The board also noted that there is no certainty either on the completion or the timing of the said proposal, said the statement. As per the sources, the main agenda of the meeting was discussing the Hutch-Essar issue.
Ambani, some weeks ago, had informed of the company having a back up of top 10 international financial institutions and private equity entities.
Analysts have pointed out that the UK-based Vodafone has already started the due diligence process on Hutch-Essar. Other potential bidders will have to arrange their lines of finance to better the Vodafone offer, which is unknown currently.
Also approved at the RCom board meeting was issuance of foreign currency convertible bonds (FCCBs) in the international markets, up to $1 billion or its equivalent, at a premium to the market price of the equity shares of the company.
The board also gave its approval on the Implementation of the Employee Stock Option Scheme (ESOS) and constituted an ESOS Compensation Committee of independent directors of the company for administering the ESOS.