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HTIL shareholders approve sale of Indian business to Vodafone

Shareholders of Hong Kong-based Hutchison Telecom International Ltd (HTIL) approved the $11.1 billion sale of its Indian business to UK's Vodafone.

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NEW DELHI: Shareholders of Hong Kong-based Hutchison Telecom International Ltd (HTIL) on Friday approved the $11.1 billion sale of its Indian business to UK's Vodafone, but the deal still requires clearance from the Foreign Investment Promotion Board here.

The transaction was approved by an overwhelming majority of the shareholders who voted at the Extraordinary General Meeting, HTIL said in a statement, adding that the completion of the potential sale is expected to take place no earlier than April 2, 2007.

Under the sale, Vodafone would acquire all direct and indirect stake of HTIL in India's fourth largest mobile player Hutch-Essar. The British mobile giant would effectively have 67 per cent control on the company, in which Indian conglomerate Essar holds 33 per cent.

The HTIL statement said "its shareholders approved the proposed sale of the company's entire direct and indirect rights and interests in respect of Hutchison Essar Limited to a subsidiary of Vodafone Group Plc for a total cash consideration of approximately $11.1 billion."

Meanwhile on a petition alleging breach of FDI policy by HTIL, the Delhi High Court on Friday asked FIPB to respond within two months whether the Hong Kong company had breached FDI sectoral cap of 74 per cent with its investment in Hutch-Essar.

HTIL holds 52 per cent direct equity stake in HEL, while 15 per cent are held on its behalf by minority Indian shareholders Analjit Singh and Asim Ghosh in order to comply with the country's FDI regulations.

HTIL had termed the allegations of FDI breach in the PIL as baseless and claims that the case would not impact the completion of the proposed transaction.

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