Vodafone Group has reached an amicable deal with India's Essar group that will give it management control of Hutchison Essar, India's fourth largest mobile carrier, the Hindustan Times reported on Tuesday.
Vodafone, which has agreed to pay $11.1 billion for Hong Kong-based Hutchison Telecom's controlling stake in the telecom, will nominate Essar group vice chairman Ravi Ruia as non-executive chairman, the paper reported, quoting sources closes to the deal.
Vodafone has also agreed to a four-year put option for the Essar group, based on an enterprise value of $18.8 billion, the paper said, with Essar retaining the right to sell in the open market some or all of its 33% stake in the telecom.
According to the agreement, the new board would have nine directors, including three Essar representatives, the paper said. Arun Sarin, chief executive of Vodafone, would be vice-chairman, the paper said.
Sarin and Ruia are in New Delhi to "tie up loose ends," the paper said.
Asim Ghosh, who the chief executive of Hutchison Essar in India, would be managing director and chief executive of the new firm, the paper said.
The Business Standard paper said Vodafone and Essar were near an agreement, and that senior Vodafone and Essar executives have held meetings with government officials.
The two sides were expected to "shake hands shortly," the paper said, adding the terms of the agreement, including a four-year put option, had been finalized and that an announcement was likely in a couple of days. "
All three parties involved appear keen to resolve the issue and avoid legal complications and investigations," it said. Earlier this month, Hutchison Telecommunications asked Indian courts to keep it informed of any legal suit filed by the Ruias, a move described by a spokeswoman as a routine procedure to protect the company's interests.