Hutch denies Essar's rights claim

In what might lead to a legal battle between the two former partners, Hutchison Telecommunications International Ltd (HTIL) has formally refuted the Essar Group's claim of right of first refusal (ROFR) over the former's stake.

It has stated that such a clause did not exist in the agreement signed between the two companies.

The Hong Kong-based company has also clarified that Essar's bid for acquiring the 67 per cent stake in Hutch-Essar was not the highest one, nor did the company try to match Vodafone's bid, which put the enterprise value of the company at $18.8 billion.

Speaking at an analysts' meeting in Hong Kong, HTIL Chief Executive Officer Dennis Lui said the Ruias-owned Essar Group did not enjoy any ROFR, as claimed by it.

He added, "whatever formalities existed with Essar have been completed," though he did not elaborate.

When contacted, an Essar spokesperson said, "Essar's position on the (ROFR) matter has not changed." He, however, declined to elaborate.

Merchant bankers say the group is studying legal options as the only recourse to the contentious issue, even as Vikash Saraf, CEO of Essar Teleholdings (the telecom investment arm), flew to London for discussions on a shareholders' agreement with Vodafone, which will replace the earlier agreement with HTIL.

The group has claimed that it enjoyed an ROFR that gave it the power to match the highest bid for HTIL's stake.

When asked why it did not sell the 67 per cent stake to the Hindujas, who are believed to have made the highest bid ($20 billion), HTIL said it was looking at the acquirer's "ability and availability of cash with them."