HTMT sells telecom stake to Hutch Tele

Hinduja TMT (HTMT) has sold its entire holding of 5.11 per cent in GSM service provider Hutchison Essar to Hutchison Telecommunications (India) Ltd (HT India) "� a wholly-owned subsidiary of Hutchison Telecommunications International "� for $450 million in cash.

The acquisition has increased Hong Kong-based Hutchison`s stake in the Indian telecom major to around 47 per cent, while 33.6 per cent is held by Ruais of the Essar group.

At this price, the valuation of Hutch India would be around $8.8 billion. "The HTMT board had decided to monetise the group's investment in Hutchison Essar to unlock the value for our shareholders and accepted the offer made by Hutch. The proceeds from this stake sale will not only help the company aggressively pursue its growth path in its businesses but also enable it to explore opportunities in new business lines," HTMT Executive Chairman Ashok P Hinduja told reporters here today.

HTMT was holding the stake through a special purpose vehicle IndusInd Telecom Network, which, in turn, was held by Hinduja group subsidiary companies "� inNetwork Entertainment, Pacific Horizon and Mauritius-listed Kumbat.

IndusInd investment bank acted as the sole financial advisor to the deal. HTMT, prior to this sale, completed the acquisition of the entire shareholding of Sumitomo Corporation in Pacific Horizon, based on which HTMT's effective shareholding in Hutchison Essar rose to 4.68 per cent from the earlier 3.45 per cent. However, the gains made by the group were not revealed, with Hinduja only revealing that HTMT had made a "substantial gain".

The proceeds of the stake sale would be utilised for the company's entertainment unit's plans for the future and for its BPO unit, which is planning for a series of acquisitions and mergers.