By virtue of his stake in HTIL, Orascom CEO Naguib Sawiris has a say in how HTIL’s 67% holdings in Hutchison Essar get sold.
NEW DELHI: If the story so far is that Hong Kong tycoon Li Ka-shing and the Ruias of Essar are scrapping over the latter’s right of first refusal (ROFR) in case Hutchison Essar is sold, here’s news: there’s one more player with ROFR rights, and it’s Orascom Telecom, the Egypt-based telecom operator which has 19.3% in Hutchison Telecom International Ltd (HTIL).
By virtue of his stake in HTIL, Orascom CEO Naguib Sawiris has a say in how HTIL’s 67% holdings in Hutchison Essar get sold, and possibly to whom. When DNA Money SMS-ed a query to Sawiris on Sunday, his cryptic reply confirmed that he had ROFR rights at the level of HTIL, in case Li wants to sell out. But if it is the holdings of HTIL in the Hutchison Essar subsidiary that get sold, the matter well have to be cleared by the HTIL board, of which Sawiris is a member (See box).
While this may not give Sawiris a veto, he clearly is a player in the game. When DNA Money asked him how Orascom would vote in case Li decided to sell, Sawiris answered enigmatically: “That is a million dollar question.”
What this could imply is that the Hutch sale really involves two Li Ka-shing partners with ROFR rights, though the one with the Ruias is admittedly under hot dispute. It could also mean that you can’t rule out Orascom as a serious bidder for Hutch at some point.
In a telephonic interview last week, Sawiris told DNA Money that he was waiting for a nod from the government to start doing business in India. If that comes, Orascom could well change from sleeping partner in Hutch to another frontrunner. Or at least one with full ROFR rights. Orascom could also be the reason why Hutchison is so clear about interpreting the Ruias’ ROFR as limited to sale to an Indian player.
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