Essar buys 3.4% stake in Hutch Max

Pays Rs 267cr, hikes stake in Hutchison Max to 30%.

Essar Teleholdings Ltd, part of the Rs 20,000-crore Essar group, has acquired a 3.43 per cent stake in Hutchison Max Telecom for Rs 267 crore.

The deal increases Essar Group's stake in Hutchison Max ""a joint venture between Hong Kong-based Hutchison Telecommunications International Ltd (HTIL) and Essar Group""to 30.42 per cent from 26.99 per cent. The deal value of the company is Rs 7,784 crore.

The purchase followed an agreement between Hutchison, Essar and Usha Martin Telematics, wherein Essar had the option to purchase Hutchison Essar's 3.43 per cent stake at the original acquisition price for the Kolkata licence plus a carry cost, Essar Teleholdings said in a statement.

Essar exercised its purchase option on June 30, the last date for the acquisition under an earlier agreement.

Usha Martin Telematics is jointly owned by Kotak and Hutchison, while HTIL is a unit of the Hong Kong business tycoon Li Ka-shing controlled Hutchison Whampoa Ltd.

This is the second Essar Tele deal in the telecom space in recent times. The company had earlier acquired a 9.9 per cent stake in BPL Mobile's Mumbai circle.

Commenting on the transaction, Essar Teleholdings Chief Executive Officer Vikash Saraf said, "This acquisition is part of our decision to enhance our stake in the consolidated entity and also reflects the strong relationship between Essar and Hutch."

Essar Teleholdings is Hutchison's partner for Indian operations, and the acquisition reduces the latter's stake to 53.1 per cent in Hutchinson Max.

HTIL, which is listed on the New York Stock Exchange and the Hong Kong Stock Exchange, was planning to list Hutchison Max in India this year.