London/New Delhi: British telecom giant Vodafone on Wednesday said it has completed the acquisition of controlling stake in Hutchisson-Essar Ltd while paying a less amount at $10.9 billion as against $11.8 billion announced earlier.
The less payment of $0.9 billion includes provisions for the previously announced settlement agreement with the Essar Group, a retention of $3.52 billion by Vodafone in consideration of their waiving off certain potential claims against the company, the receipt of interest from Vodafone and transaction cost and expenses.
The stage is now set for Vodafone to start its operations in India, which is witnessing an addition of five million new mobile subscribers every month. The Hutch-Essar will also become Vodafone-Essar over a period of time.
Vodafone CEO Arun Sarin had earlier said they would work towards becoming the leading mobile player in India.
The estimated pre-tax gain from the sale is expected to be approximately $9 billion to Hutchisson Telecom International Ltd, which sold its entire stake to the British player in India's fourth largest mobile operator Hutchisson-Essar, HTIL said in a statement.
Commenting on the completion of transaction, Sarin said, "I am delighted that, having secured all the necessary regulatory approvals, we are now able to complete this important transaction and move onto the process of integration."
"India is a tremendously exciting, fast moving market and I am confident that the Hutch Essar business will make a major contribution to the Vodafone Group over the coming years," he added.
HTIL Chairman Canning Fok said, "Today marks the conclusion of an outstandingly successfulful venture for Hutchisson Telecom.
"I want to thank our management, my colleagues at Hutchisson-Essar and our many associates and friends in India for their contribution over the years building this world-class enterprise. I wish them every success in the future," he said.
The Board of Directors of HTIL is expected to declare a special dividend of 6.7 Hong Kong dollars per share following the completion of necessary formalities, HTIL said in a release on its website adding the details of the payment arrangement will be announced soon.
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