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This story is from March 13, 2006
Ruias to buy Hindujas stake in Hutch Essar
The Essar group is cementing its ownership in cellular operator Hutchison Essar by acquiring a 5.11% stake owned by the UK-based Hinduja family.
MUMBAI: The Essar group is cementing its ownership in cellular operator Hutchison Essar by acquiring a 5.11% stake owned by the UK-based Hinduja family.
The acquisition will give the Ruias of Essar more ammo to fight Hutchison Whampoa, their Hong Kong-based partner which is trying to muscle in its Egyptian associate Orascom into the venture.
The government has raised security concerns about Orascom, which reportedly has Pakistani connections, owning a stake in the telecom company.
According to a source, Ruias and Hindujas are in the final leg of negotiations and an agreement could be signed any time. As a prelude to the sale, the Hindujas restructured their holding in Hutch Essar on Monday evening.
If a deal happens, the Ruias will become the largest shareholders in the company with a 38% stake, more than Whampoa's 10% held directly and another 25% held through the US-listed Hutchison Telecom India Ltd (HTIL).
Since Orascom holds about 20% stock in HTIL, it indirectly owns 4% in Hutch-Essar. The public has 17% and the rest 11% is owned by the company's MD Asim Ghosh and Max Healthcare's Analjit Singh.
The acquisition will give the Ruias of Essar more ammo to fight Hutchison Whampoa, their Hong Kong-based partner which is trying to muscle in its Egyptian associate Orascom into the venture.
The government has raised security concerns about Orascom, which reportedly has Pakistani connections, owning a stake in the telecom company.
According to a source, Ruias and Hindujas are in the final leg of negotiations and an agreement could be signed any time. As a prelude to the sale, the Hindujas restructured their holding in Hutch Essar on Monday evening.
They acquired a 1.23% stake held by Sumitomo Corporation in the company to take their total holding to 5.11%. Sumitomo is learnt to have been holding the stake on behalf of the Hindujas.
If a deal happens, the Ruias will become the largest shareholders in the company with a 38% stake, more than Whampoa's 10% held directly and another 25% held through the US-listed Hutchison Telecom India Ltd (HTIL).
Since Orascom holds about 20% stock in HTIL, it indirectly owns 4% in Hutch-Essar. The public has 17% and the rest 11% is owned by the company's MD Asim Ghosh and Max Healthcare's Analjit Singh.
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