Max India Open To Selling Hutchison Telecom Pie

Max India on Tuesday said it was open to exiting from the cellular business by selling its 10 per cent stake in Hutchison Max Telecom, the mobile operator in Mumbai, to strategic investors.

A top Max India executive said that the company would explore the possibility of selling its stake in Hutchison Max if it gets a good valuation. At present, investment banker JM Morgan Stanley is valuing its holding. "Though we are open, the company is yet to begin any negotiations with investors for the purpose," the executive added.

Industry sources say the Essar group, which is eyeing a 30 per cent stake in Hutchison Max Telecom, could be interested in buying the Max India stake. The Mumbai mobile circle, which has a cellular base of over 4 lakh, is believed to have been valued at around $300-350 million by investment bankers appointed by Essar.

According to Essar Teleholdings executives, though the group is keen to pick up a 30 per cent equity in Hutchison Max as per its earlier agreement with the Hong Kong-based telecom giant, Essar is yet to commence formal negotiations with the existing investors in Hutchison Max.

The Essar group has already begun negotiations with financial institutions and banks to raise funds to part-finance the acquisition of a 30 per cent stake each in the Hutchison-affiliated circles in Kolkata and Mumbai.

Hutchison Telecom has a 49 per cent stake in Hutchison Max, while a special purpose vehicle promoted by Kotak Mahindra and Hutchison, and Max India have the remaining stake.

Earlier, Max India had sold a part of its stake in the Mumbai cellular venture to Hutchison. The 10 per cent sell off will complete the exit of the Delhi-based Max India from the cellular business. The group, which is going through a major restructuring exercise, is focusing on the insurance, bulk pharmaceuticals, infotech, healthcare and medical transcription businesses. Healthcare and information technology constitute its core business, apart from life insurance.