Essar has option to sell 33% stake

NEW DELHI: The Essar group has now got the option to sell its 33% holding in Vodafone Essar to Vodafone for a floor price of $5 billion after December 8, 2011. Essar Communications on Friday announced the closing of the $3.59 billion term loan for monetisation of liquidity rights between Vodafone and Essar.

The monetisation of liquidity rights was an agreement entered into by the two parties when UK-based Vodafone acquired a controlling interest in Hutchison Essar, now renamed Vodafone Essar.

The liquidity rights include Essar having an option to sell its stake to Vodafone, and the facility has a maturity date of December 8, 2011.

The facility was underwritten and arranged by BNP Paribas, Citigroup Global Markets, Commerzbank AG and Stanchart to monetise the liquidity rights.

Vodafone Essar is the second-largest GSM mobile operator in India with 37 million subscribers as on October 31. With a 17% market share in the country, it operates in 16 circles and has licences to operate an additional seven circles.

Earlier this year, Vodafone had acquired a controlling interest in Hutch Essar for $11 billion. Vodafone then partnered with Essar to operate Vodafone Essar.

Vodafone chief executive Arun Sarin had recently said that revenue from emerging markets such as India and Turkey had increased 40%, unlike in most of Europe where growth was slow.