Hutchinson-Essar receives four bids, decision soon
Vodafone, Reliance, Hinduja group and Altimo are the first to submit bids, report L Mishra and V Ganesh.india Updated: Feb 10, 2007 21:21 IST
On Sunday, in a boardroom of a 25-storey tower in Hong Kong's New Territories, a Chinese billionaire and his executives will decide the fate of what experts are calling India's last great telecom deal.
Li Ka Shing (78), the man Hong Kong calls "Superman" for his deal-making abilities, will chair a meeting of the board of Hutchison Telecom International Ltd to view the e-mail bids submitted by four prospective buyers of India's fourth-largest telecom operator, Hutchison Essar.
In the running are the UK's Vodafone, India's Reliance Communications, the Hinduja group, and Hutch's Indian partner, Essar. Ranged behind them are diverse backers, from Qatar Telecom to Russia's Altimo.
The bids for a 67 per cent stake in Hutchison Essar range from $14 billion (Rs 61,700 crore) to $16 billion (Rs 70,500 crore), corporate sources told HT on condition of anonymity.
Whoever wins the bidding, the real winner is likely to be Li, who took over Hutchison in the late 1970s as the power of the British business elite waned in Hong Kong.
Li - son Richard founded Star TV in 1990 - and his executives must decide if they want to cash out or stay on in India, the world's fastest growing telecom market: 6.3 million subscribers signed on in January, taking the total to 130 million.
Hutchison International will seek shareholder approval by mid February.
Officials from Li's Hutchison Whampoa group could not be reached for comment, but an analyst from an investment-banking firm in Hong Kong told HT Li could use the money.
"Hutchison had committed billions to build 3G (third generation) networks in Europe and Australia, it paid $6.9 billion (Rs 30,400 crore) for a 3G licence in Britain but has not got returns for the kind of money poured in," the analyst said, requesting anonymity.
An Indian telecom analyst, also asking not to be named, said part of the $6.9 billion was a loan without collateral from parent company Huthison Whampoa. "He wants to pay off this loan as quickly as possible," the analyst said.
First Published: Feb 10, 2007 16:19 IST