Vodafone conducts due diligence of Hutch

By siliconindia   |   Tuesday, 09 January 2007, 18:30 IST
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Mumbai: Vodafone Group PLC, UK?s mobile phone company, has started the ?due diligence? on Hutchison Essar (HEL), India?s fourth largest mobile. This suggests Vodafone emerging in the lead position for the takeover of Hutchison Essar, behind India?s Reliance Communications and Essar group. Reports state that Reliance Communications (RCOM) and Essar have been denied ?due diligence? on Hutch until now. On talks of a take over of 67 percent stake of Hutchison Whampoa, Essar Group chairman Shashi Ruia says, ?Of course we are interested.? He further added that Essar owns 33 per cent in HEL, eliminating the necessity to conduct the due diligence. Vodafone, a-20-member-team of officials, including legal, accounts, regulatory and international affairs, have started examining the books of the company. In the next four days, the team will look into the top-line and earnings multiples of Hutchison Essar along with the customer base and cash flow figures. The officials will get an understanding of the number of lost and dead connections of subscribers ever since the news about the takeover was announced in India. Vodafone will check - the track record, customer base, growth areas, number of towers among other operational aspects of the business of HEL, getting an opportunity to check the facts and figures submitted to them by HEL. Ernst & Young is believed to be appointed by Vodafone to carry out the due diligence. Sources have suggested that Vodafone CEO Arun Sarin could visit India during the due diligence process on January 10. The Vodafone official in London neither confirmed nor denied the information.