BPL Row: Hutch moves court against Essar

Stung by the termination notice issued by its joint venture partner Essar over the merger of BPL Mobile (Mumbai circle) into Hutchison Essar, Hutch has moved the Bombay High Court against the notice terming it as "unlawful".

Both Hutch and Essar officials individually confirmed that the matter is now in court and will be fought there.

Following the termination notice, Essar had decided not to sell the BPL cellular business in Mumbai, the most lucrative metro circle, to Hutch Essar, a company in which it holds about 33% stake.

Hutch officials did not disclose the plea under which they had moved court against the notice, saying the matter is now subjudice.

The latest turn of events has contributed in a big way to the already sour relationship between the partners over Hutchison's decision to bring Egyptian mobile operator Orascom into the board of Hutchison Essar after a global transaction with that company.

Essar had vehemently opposed the entry of the company into the board through an indirect 19% stake citing security reasons.

Essar had bought BPL Mobile at an enterprise value of $1.1 billion last year. The deal was later extended to Hutchison Essar for the eventual merger into the JV. The deal for three circles - Maharashtra and Goa, Tamil Nadu and Pondicherry and Kerala - concluded in January. The merger in Mumbai was pending for the last ten months.

According to sources, Essar has already started looking for partners to sell BPL Mobile.