Anil Ambani uncertain about Hutch deal but stays interested

Thursday, 28 December 2006, 06:00 Hrs
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New Delhi: Reliance Communications chairman Anil Ambani said he was not certain if his company would be able to acquire stake in Hutch-Essar for which global mobile telephony giant Vodafone is a strong contender.

"I don't know if Reliance Communications will emerge as a successful bidder, as there are no certainties in these kinds of deals," Ambani told a video conference with reporters from his office in Mumbai.

"We can only follow conservative merger guidelines," he said, when asked for his opinion about Vodafone's bid for the 67 percent stake in Hutch-Essar that places the company's overall valuation at $21 billion.

He nevertheless said that the deal was a potential growth opportunity for the company, given its keen interest in entering the GSM segment of mobile telephony as opposed to its presence only in the CDMA market today.

"The Hutch buy-out will be an inorganic growth opportunity for us and we have received exclusive financial support from global bankers and leading financial institutions," Ambani said.

"We will have an enhanced focus on GSM in the future. Hutch fits well in this overall strategy. Top private equity players have also approached us and they are willing to provide debt as well as equity."

The Hong Kong-based Hutchison Whampoa wants to sell its 67-percent stake in its mobile telephone joint venture with the Essar group of the Ruia family, which owns the remaining 33-percent stake.

The relations between Hutchison, owned by Li Ka-Shing, a leading businessman in Hong Kong, and the Ruias reportedly turned sour after the former made an entry into Pakistan's telecom market with Egypt's Orascom without consulting the Indian partner.

The Vodafone board has given the mandate of negotiating the deal to its Indian- born chief executive officer Arun Sarin, an alumnus of the Indian Institute of Technology (IIT), Kharagpur.

Vodafone already has a 10 percent stake in a Indian telecom company, Bharti Televentures. Bharti would have to waive a non-compete clause to enable Vodafone acquire the Hutch stake.
Source: IANS
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