Mumbai: Essar, the Indian partner of Vodafone in its new acquisition, Hutchison Essar Ltd (HEL), is looking for parity in partnership ahead of discussions with the UK giant, which is taking a majority 67 per cent stake in the company.
Reports quoting Essar sources said it wanted 'partnership of equals' and 'joint management' in the country's fourth largest mobile venture, HEL. Essar Teleholdings CEO Vikash Saraf also refuted reports that Essar could exit the business, provided Vodafone paid a premium for its 33 per cent stake in HEL.
"We are the founder partner and shareholder. We will continue as a strategic partner in HEL and not as an investment partner," the report quoted him as saying.
"So, where is the question of seeking a premium?" he asked adding, "The fundamental tenet of the partnership with Vodafone will be a partnership of equals where both sides have a meaningful role. This will be the basis for any agreement with Vodafone."
Vodafone CEO Arun Sarin, who was in India last week after clinching the $11.1 billion deal to acquire 67 per cent stake in HEL, had held discussions with the Essar promoters, the Ruias. Further discussions between Ruias and Vodafone are expected to start later this week for which group vice chairman Ravi Ruia is slated to fly to London.
Although Sarin had exuded confidence that an agreement with Essar would be signed soon, Saraf said: "We have communicated our views. Discussions are at a preliminary stage. They (Vodafone) have also expressed almost similar views, saying that Essar can add lot of value."
"This is an early stage. But we want the shareholder agreement to address all aspects including when the partners are working together to add value and in the eventuality, if any, of either of the partner quitting," the report quoted him as saying.
Meanwhile, Egyptian telecom entrepreneur Naguib Sawiris, whose Orascom Telecom is a minority shareholder in Hutchison Telecom International Limited (HTIL), said the Mumbai-based conglomerate has been a 'troublesome' partner and that Vodafone should try to buy the Essar group out of Hutchison Essar.
Hutchison Whampoa and Orascom own 49.7 per cent and 19.3 per cent respectively of HTIL, which last week agreed to sell a 67 per cent stake in Hutchison Essar to Vodafone. Essar, which owns the remaining 33 per cent in HEL, clashed when Orascom bought its stake in HTIL in 2005, because Essar said it had a right of first refusal over any transaction affecting the ownership of Hutchison Essar. They are also at loggerheads over Essar's decision last year to drop its planned sale of mobile operator BPL Mumbai Communications to Hutchison Essar.
Vodafone chief Arun Sarin had said last week the UK group's preference was for Essar to be its partner, although it would also offer to buy its stake.