Egyptian telecom firm Orascom's CEO Naguib Sawiris has resigned from the board of Hong Kong-based Hutchison Telecom days before its shareholders are scheduled to consider the sale of its stake to Vodafone.
NEW DELHI: Egyptian telecom firm Orascom's CEO Naguib Sawiris has resigned from the board of Hong Kong-based Hutchison Telecom, days before its shareholders are scheduled to consider the sale of its stake in Indian mobile venture Hutch-Essar to Vodafone.
While HTIL asserted Sawiris had no 'disagreement' with the board that could have fuelled his resignation, sources close to the development here said that it might be because of his reservations over the deal and the development could be a precursor to Orascom selling its 19.3 per cent stake in HTIL.
HTIL would seek shareholders' support for the deal on March 9 and Sawiris' resignation could play a dampener given Orascom's significant stake, the sources added.
"Sawiris has no disagreement with the Board and he is not aware of any matter relating to his resignation that needs to be brought to the attention of the shareholders of the company," HTIL said in a statement.
However, Orascom itself had been interested in acquiring control of Hutch-Essar and is believed to have expressed its unhappiness to Hutchison top brass over the deal.
Meanwhile, after losing out in race to buy Hutch-Essar in India, Orascom is now mulling an acquisition in another emerging market, Brazil, and is planning to part-fund the transaction with the sale proceeds of its HTIL stake.
Orascom said in a statement it was interested in acquiring Telecom Italia's 38 per cent stake in Brazilian fixed and mobile operator Brasil Telecom.
"The interest in Brasil Telecom is in line with its declared strategy to watch out for investment opportunities in emerging countries," the company said.
Orascom will also receive a special dividend of HK6.2 billion dollars (about $800 million) by virtue of its 19.3 per cent stake, as part of HTIL's plans to pay a special dividend of HK6.75 per share from sale proceeds of HEL.
Analysts believe that the special payment would help Orascom fund its bid for controlling stake in Brasil Telecom.
Sawiris' resignation from HTIL board comes less than a month after Hutchison Telecom agreed to sell a 67 per cent stake of its Indian venture to Vodafone on an enterprise value of $18.8 billion.
Orascom is the second-largest shareholder in HTIL after Hong Kong billionaire Li Ka-shing.
The Egyptian firm's investment and business development officer Michael John O'Connor would replace Sawiris as a non-executive director on board, HTIL said.
Sawiris had told British daily Financial Times soon after the Vodafone deal he was disappointed with Hutchison Whampoa, the Hong Kong-based conglomerate that had the decisive say in the sale of the controlling stake in Hutchison Essar.
"Orascom was unhappy at the sale of the 67 per cent stake in Hutchison Essar, partly because the Cairo-based group had ultimately hoped to secure control of HTIL," the paper had quoted Sawiris as saying last month.
Late last month, HTIL CEO Dennis Lui had said after announcing the Vodafone deal the sale was 'unanimously approved' by Sawiris and other directors.
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