Ruias to get $415 m from Hutch

The Ruias will receive $415 million from Hong Kong-based Hutchison Telecom International Ltd (HTIL), its former partner in Hutchison-Essar, as settlement to ensure the sale of its 52 per cent stake to Vodafone is completed.

Under the settlement agreement, the Ruias will not initiate any action that may inhibit or delay the transaction, HTIL said. Top sources say the deal is essentially to compensate the Ruias for not seeking legal options on its right of first refusal over its former partner's divestment.

In addition, Essar will give HTIL certain indemnities and waiver rights it may have in relation to the transaction.

HTIL, in turn, has agreed to pay Essar $ 373.5 million at the close of the transaction with Vodafone and a further $ 41.5 million and interest till the second anniversary. HTIL has decided to sell of its 52 per cent equity stake to Vodafone subject to regulatory clearances.

The move would have jeopardised HTIL's deal with Vodafone.