Company expects to seal the Hutch deal by June

SHAREHOLDING ROW

British telecom major Vodafone believes that it is on track to complete the acquisition of Hutchison-Essar, despite the acquisition effort being plagued by myriad issues and pending of regulatory approvals. The company is still expecting the deal to be closed by the second quarter of this fiscal, as was intended at the time of the takeover in February 2007.

"We have always said that we expect to complete the acquisition sometime in the second quarter of the year, that is between April and June. We remain on track and expect to close in the second quarter as originally stated," a Vodafone spokesperson said in an e-mail reply to Business Standard.

On the regulatory approvals that are pending, he added, "We remain confident that approvals will be forthcoming. We have received consistent advice that the structural arrangements for our holding in Hutch are legal and compliant with all Indian regulations".

According to a source close to the development, the deal did not have a stipulated closure time-frame, even though Vodafone was looking at tying it up within 90 days. Vodafone CEO Arun Sarin, during his visit to the country earlier, had also said this.

The deal has got stuck in the Foreign Investment Promotion Board (FIPB) with various ministries raising the issue of shareholding in the new entity.

On April 2, the law department referred the issue back to the finance ministry stating that the ministry could investigate the shareholding pattern in Hutch-Essar under Section 247 of the Companies Act, 1956. The law ministry also opined that the attorney general's opinion should be sought as the matter involved a lot of complex issues.

This could result in further delay, as the crucial FIPB approval might not come through in time. The FIPB, which falls under the finance ministry, has convened a meeting on April 12 to discuss the matter.