Hutch may swing Essar way

MUMBAI: The battle for Hutch Essar may be swinging the Ruias��� way. There are indications that Hutchison Telecom International Ltd (HTIL), which holds 67% in Hutch Essar, is considering giving the Ruias right of first refusal (ROFR). The Ruias, who hold 33% in Hutch Essar, have contended from day one that the agreement between them and Hutch gives them ROFR, but the Hong Kong-headquartered conglomerate has hotly contested this.Both sides have claimed that legal opinion is on their side.
But now ��� the day after Hutch received bids from Vodafone, Reliance Communications, the Hindujas and the Ruias and the day before a board meeting of Hutch Essar in London ��� it seems Hutch may be softening its position. It is said to have received opinion from a UK law firm that the Ruias may have a case. Although the term sheet signed by Hutch and Essar in July 2003 favoured Hutch in this particular situation, it was not formalised into a shareholders��� agreement. In the absence of such a pact, the Ruias argued, an earlier agreement reached between the two in May 2000 would still be valid. The earlier agreement, it appears, was weighed in favour of the Ruias.
Essar vice chairman Ravi Ruia and HTIL chairman Canning Fok are believed to have met in London on Friday night, ahead of the board meeting. Indications are that Hutch is not in the mood for a messy legal fight as long as it gets the best possible price.
If Hutch decides to sell, it has to give Essar 21 days to match the best offer. And it gets another 30 days to make payment.