Vodafone calls on PM, Essar for shareholding

New Delhi, Feb 16: Chief Executive Officer of Vodafone Arun Sarin today met Prime Minister Manmohan Singh and chalked out the company's plans for rural expansion into India after clinching a controlling stake in Hutch-Essar earlier this week.

Expressing confidence over signing a shareholder agreement with the Essar group, Mr Sarin called on the Prime Minister this morning before flying back to London to round off his three-day visit to India.

He told reporters after visiting the Prime Minister that Essar would remain a partner in the mobile venture.

In a statement last night, following his meeting with Essar Chairman Shashi Ruia, Vice Chairman Ravi Ruia and other directors, the Indian conglomerate had said it would take a decision on its position in due course.

''We will ensure that all of our shareholder rights, including those under our shareholder agreement with Hutchison, are adhered to,'' the Group had said.

Vodafone said it would discuss its investment plans with Essar while adding that ''shareholders agreement with Essar will be hopefully signed soon''.

Mr Sarin said the company would invest two billion dollars in a ''couple of years'' for expansion of Hutch-Essar in India as part of efforts to become the country's largest mobile operator with a target of 100 million subscribers.

The issue of Right of First Refusal (RoFR) is also likely to dominate the agenda when the two meet again.

The two partners had met in Mumbai yesterday and Mr Ravi Ruia had announced that they would not exit the business.

Essar, which holds 33 per cent stake in the mobile venture, was earlier understood to be unhappy with Vodafone not consulting it on network infrastructure sharing agreement with rival Bharti Airtel.

Mr Sarin had said the Essar group does not have the right to first refusal over the British telecom giant's 11.1 billion deal to buy a controlling stake in Hutchison Essar.

''With respect to Vodafone, Essar does not have right of first refusal,'' Mr Sarin said.

Essar, that owns a third of Hutchison Essar, a joint venture with Hong Kong-based Hutchison Telecom International Ltd, has claimed rights of first refusal in any sale in the company.

Hutchison has said the right would apply only if it sold its stake to certain Indian companies. On Sunday, Vodafone said it would acquire a 67 per cent stake in Hutchison Essar from Hutchison Telecom for 11.1 billion dollars.

UNI

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