Print this page Email this story Vodafone, Essar ink deal

NDTV: "Arun Sarin would be a happy man. He has finally managed to convince the Ruias to stay on in Hutch as Vodafone's partners. Vodafone and Essar have agreed on partnership terms. Therefore, Hutchison Essar will now be renamed as Vodafone Essar. Vodafone has said that Essar would have certain liquidity rights. Essar group would continue to hold 33 per cent in Hutch-Essar.

However, Essar will have the option to sell 33 per cent in Hutch Essar to Vodafone. It has kept its exit options open through the right to sell its stake in three-four years. Vodafone also said that Ravi Ruia would be the Chairman, while Arun Sarin will be the Vice Chairman.

With penetration levels of around 13 per cent, both partners believe that there are substantial growth opportunities in the Indian mobile telecommunications market. The minimum return guaranteed is the valuation paid by Vodafone for the Hutch stake right now. However, Vodafone would have to pay more if the valuations go up. Asim Ghosh would remain the MD of Hutch's new avatar Vodafone-Essar. He would retain his core management team and report directly to Vodafone on day-to-day operations.

It's a compromise deal that will finally allow Vodafone to start its operations in India. However, going by Essar's rocky relations with Hutch, Sarin will need all his negotiation skills to keep the partnership going. "