The Rs 20,000-crore Essar group today announced that it has entered into an understanding with Max Telecom Ventures to acquire the latter's 3.16 per cent stake in Hutchison Essar Telecom for Rs 657 crore, putting the valuation of the telecom firm at close to Rs 21,000 crore.Priced at Rs 607 per share, the all-cash deal will see the Essar group's holding in Hutchison Essar, its joint venture with Hutchison Telecommunications International, go up from 30.42 per cent to 33.58 per cent. Essar Teleholdings, an investment firm of the Essar group, will buy the shareholding of Max Telecom Ventures."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," said Vikash Saraf, CEO, Essar Teleholdings.The consolidation move comes barely a month after the group signed an agreement to sell BPL Mobile Communications and BPL Cellular to Hutchison Essar.In addition, it also agreed to sell Essar Spacetel, the company that has applied for licences in seven telecom circles, to Hutchison Essar for $6 million (Rs 27 crore) in September.The group, which has presence in a variety of sectors like steel, shipping,power and oil & gas besides telecom, has been trying to consolidate its stake in the telecom service space.The consolidation move is also seen as an indication of an impending IPO by Hutchison Essar, the second biggest private sector player in the GSM sector.Holding of Max Telecom Ventures, which has been an investor in Hutchison Essar, came down from 10 per cent to 3.16 per cent after the company had gone through a series of acquisitions and infusions of capital.Hutchison Essar is in the midst of restructuring including pruning its brands. The company plans to phase out its 'Orange' brand in this financial year and consolidate all its operations, including that of the acquired BPL Communications and BPL Mobile, under the Hutch umbrella.Sources close to the developments said the consolidation of brands would help provide a 'more effective and customer-centric approach" and offer uniform rates and services across all its 13 circles in the country.
