No problems with IPO, but merger wrong: Vodafone
24 Jan 2011
British telecoms major Vodafone PLC on Sunday said it was not against Essar conducting an initial public offering for its 33-per cent stake in the Vodafone-Essar joint venture, but continued to allege that the Essar Group did not provide material information to the Securities and Exchange Board of India and the Bombay Stock Exchange about the proposed merger of two of its companies.
Essar, however, dismissed these allegations and said the company has already clarified its stand.
Essar has proposed to merge its Essar Telecommunications Holding Pvt Ltd (ETHPL), which has an 11 per cent interest in Vodafone-Essar joint venture, with another of its companies, Indian Securities Ltd (ISL), which is listed on the BSE. Vodafone has objected to this merger saying the move may distort the valuation of the JV.
"The merger scheme between India Securities and ETHPL is fully compliant with all applicable Indian laws, capital and financial sector regulations," Essar said.
"Vodafone has not blocked Essar from conducting an IPO of its interest in Vodafone Essar. We have no objection if Essar wishes to IPO its stake," Vodafone said in a statement. But it continues to object to the proposed merger, saying it is contrary to what has been stated in the Indian Securities Ltd merger scheme document and it was not disclosed to the shareholders of the ISL.
"Vodafone continues to believe that material information has not been provided to the market and it has raised its objections with the Madras high court and the BSE and the SEBI," Vodafone said in a statement.