New Delhi: Hutchison Telecom International, which sold its India mobile business to British major Vodafone for $11.8 billion (Rs49,547 crore) in February, is expected to complete stake sale in the second quarter of 2007.
“2007 will be a transition year for the group. We expect to complete the sale of our interests in India in the second quarter of 2007 which will leave the group exceptionally well capitalised,” Fok Kin-ning Canning, Chairman Hutchison Telecom International, stated in the annual report of the Hong Kong-based company.
The sale is conditional on our shareholders’ approval (which has already been obtained) and Indian regulatory approvals, he said.
In February 2007, the group accepted an offer to unlock substantial value from its Indian investment.
The sale of its interests in India will enable Hutchison Telecom to become one of Asia’s best capitalised companies and will put it in an unparallelled position to take advantage of new business opportunities, the report said quoting Canning.
The company recorded a substantial increase in turnover from India, which contributed 46.3% of the group’s turnover.
Canning is particularly jubilant over the Hutch Essar stake sale describing it as “a substantial return on the group’s investment at significant premium”.
“I am particularly pleased to report on the proposed sale of the Group’s interests in India, an excellent example of our strategy of creating value in emerging mobile markets and realising that value for the benefit of shareholders at the right time,” Canning said.
“Against the backdrop of a rapidly increasing customer base, we saw a substantial increase in the value of our business in India, which attracted some of the world’s leading mobile operators to approach and ultimately make an offer for the Group’s entire interests in its Indian mobile telecom operation comprising Hutchison Essar Limited and its subsidiaries (“Hutchison Essar”),“ Canning reasoned.
As a result the Board of Directors recommended that shareholders accept an offer from Vodafone that valued the Group’s interests at approximately HK$86,570 million (approximately $11,080 million).
“Having built one of the most successful, respected and valuable businesses serving India’s growing telecom market, we are delighted to have been able to achieve a substantial return on the group’s investment at a significant premium”, he pointed out.
The report mentions about the acquisition of BPL Mobile in three circles — Kerala, Tamil Nadu and Maharashtra.
The year commenced with the acquisition of Hutchison Essar Cellular Limited , formerly BPL Mobile Cellular Limited which added further three circles — Kerala, Maharashtra and Tamil Nadu — to the 13 licence areas already operating.
“Unfortunately the acquisition of BPL Mobile Communications Limited did not conclude due to the failure of the vendor to complete the transaction resulting in the matter being referred to arbitration”, the report said.