Vodafone's battle to take control of India's fourth-largest mobile operator has taken another twist after Russian operator Altimo and Egypt's Orascom expressed interest in investing in Hutchison Essar.
Vodafone already faces stiff competition from Essar Group, which already owns a 33 per cent stake in the company, the local operator Reliance Communications and the billionaire Hinduja brothers.
Hutchison Whampoa, the Hong Kong conglomerate, is selling its 67 per cent stake in Hutchison Essar. The company's board will meet on Monday to discuss its options after receiving various informal proposals to buy the stake, including an offer from Vodafone that is understood to value the Indian operator at around $17bn. The British operator is conducting due diligence over Hutchison Essar's books and expects to make a formal offer early next month.
Yet Altimo, the telecoms arm of Russian conglomerate Alfa Group, has unexpectedly entered the fight. Teijo Pankko, Altimo's chief financial officer, said the company was in talks with the Ruia family that controls Essar Group and the Hinduja family about funding a takeover of the Indian operator.
Mr Pankko said that Altimo wants to take a minority stake in Hutchison Essar and would have no problem raising cash for a bid given Alfa Group's highly cash-generative oil business. "It [Hutchison Essar] is of natural interest," he said.
Orascom has refused to rule out a move to take control of Hutchison Essar. Orascom owns a near 20 per cent stake in Hutchison Telecommunications International that holds Hutchison Whampoa's stake.Reuse content