London: Britain’s Vodafone, which acquired controlling stake in mobile firm Hutch-Essar, on 30 May said it will transfer its 5.6% stake in Bharti Airtel back to the Indian mobile leader by November next year.
Following acquisition of control in Hutch-Essar for $10.9 billion in cash, Vodafone had entered into a share sale agreement with Bharti regarding its 5.6% equity in the company.
“The shareholding will be transferred in two tranches, the first before March 31, 2008 and the second by November 2008,” Vodafone said in a statement after announcing its annual results for the year ended March 31.
“Following the completion of this sale, the Group will continue to hold an indirect stake of 4.39% in Bharti Airtel,” it added.
Vodafone completed the purchase of Hutch-Essar stake from Hong-Kong based Hutchison Telecom International Ltd (HTIL) on May 8.
The UK company paid $10.9 billion in cash to HTIL, as against the previously agreed price of $11.08 billion, reflecting retention and closing adjustments agreed between Vodafone and HTIL.
Vodafone said that Bharti Airtel irrevocably agreed on May 9 to purchase its 5.6% shareholding and it expects to receive $1.6 billion in cash consideration for this shareholding by November 2008.
Vodafone CEO Arun Sarin said: “The last year has seen a further reshaping of Vodafone’s portfolio, with our acquisitions in Turkey and India further increasing the Group’s exposure to the exciting growth opportunities in emerging markets. We are well placed to continue delivering on our strategy.”
Vodafone nominees resign from Bharti board
British mobile giant Vodafone’s two nominees on the Board of Bharti Airtel have resigned, following its takeover of Hutch-Essar and stake sale in the Sunil Mittal-led company.
Bharti Airtel chairman and managing director Sunil Mittal said at a CII meeting both the directors - Gavin Darby and Paul Donovan - have resigned. A Vodafone spokesperson also said the two directors have quit.
In January, the Vodafone directors had abstained from the Board meeting when the company was in the race to acquire Hong Kong-based Hutchison Telecom International’s stake in India’s fourth-largest mobile operator Hutch Essar Ltd.
Donovan is CEO Eastern Europe, Middle East, Asia Pacific and affiliates, while Darby is CEO for America, Africa, China and India. Donovan was inducted on Bharti Board in April 2006.
Vodafone still retains a 4.4% indirect stake in the Indian telecom firm. The two companies have also signed a Memorandum of Understanding relating to a comprehensive range of infrastructure sharing options in India, with an emphasis on rural areas.