Ruias-led Essar Group today said it expects to close the $5-billion transaction with Vodafone by November this year and will continue to honour the terms of its agreement with the UK-based partner.
"Essar fully intends to honour all its rights and obligations under the various agreements with Vodafone and also expects Vodafone to do the same. This will be done in accordance with all applicable laws and regulatory approvals," Essar said in a statement.
"Essar continues to be a shareholder in Vodafone Essar with all its rights and obligations until the transaction is concluded, which is expected by the end of November," the statement added.
The statement comes amid reports that Essar Group may ask for $700 million more for selling its 33% holding in Vodafone Essar.
Last month, Vodafone said it would purchase Essar's 33% stake for $5 billion by exercising put and call options.
The report said Essar would invoke a Reserve Bank of India (RBI) resolution that stipulates a minimum value for Indian shares in privately-held companies.
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When contacted, Vodafone spokesperson said, "We are aware of the RBI guidelines and for the current transaction, we comply with them. We don't see any change as far as the deal is concerned."
"The contract which is legally binding for us and Essar states that we can exercise our call option and Essar exercising its put option. The $5-billion deal is still there. There is nothing more to that," Vodafone spokesperson told PTI.
Vodafone had entered Indian market in 2007 when it bought Hutchison's stake in the joint venture for over $11 billion and after that had entered into an agreement with Essar for a call and put option for its stake.
The two firms were locked in a battle over Essar's plan to list a firm that had part stake in the joint venture to find out market value of its 33% stake.
The pact had a put option for about 22% held by the Essar Group overseas and a call option for Vodafone to buy about 11% stake that the Essar Group held in India.
Call Option allows an investor the right but not the obligation to buy a stock, bond, commodity or other instrument at a specified price within a specific time period.
On the other hand, Put Option is an option contract giving the owner the right but not the obligation to sell a specified amount of an underlying security at a specified price within a specified time.
Essar first exercised its put option for the entire 22%, following which Vodafone exercised its call option for the remaining 11%.