New Delhi: Bridging the differences on management structure and ownership issues, UK telecom giant Vodafone and Indian conglomerate Essar would most likely ink a deal in the next two-three days for jointly running India's fourth largest mobile firm Hutch Essar Ltd (HEL).
Arun Sarin, CEO of Vodafone, which successfully bid for acquiring majority stake in the venture from Hutchison Telecom International Ltd (HTIL) of Hong Kong, would visit New Delhi for the purpose.
As part of the deal, Essar's Ravi Ruia would be the Chairman of the reconstituted Board of HEL, while Sarin is expected to be the Vice Chairman, sources said.
Vodafone officials remained tight-lipped about the development, while the spokesperson of the Indian partner maintained that the talks were on and that "we would not like to comment at this juncture."
During the detailed discussions that the two sides had, it became quite clear that Essar, which holds 33 per cent stake in the venture, would not exit and instead has got a guarantee from the UK giant to exercise put option.
Under this option, Essar could sell its equity to Vodafone till up to 3-4 years at the same price at which the British firm agreed to buy equity from HTIL.
Vodafone and Essar are expected to sign a fresh shareholders agreement as part of the deal and the reconstituted board of HEL would have representatives as per the equity ratio of the two in the company.
The British mobile giant had reached an agreement to acquire HTIL's controlling stake in HEL for $11.08 billion in cash and about two billion dollars in debt assumptions on an enterprise value of $18.8 billion after outbidding rival offers from Reliance Communications and Essar Group, among other suitors.
Essar, which had taken umbrage to Vodafone's unilateral announcement of an agreement with India's telecom leader Bharti for sharing of infrastructure, had taken a hard line demanding "partnership of equals" and sought to safeguard its right of first refusal (RoFR) even in the renewed agreement.
Sarin, who visited India last month after clinching the deal with HTIL, had gone to Mumbai to meet the Ruia family seeking their total cooperation. Essar officials had later sought to clarify certain issues, including structure of shareholding agreement and management participation with Vodafone, while holding out the threat that they had the right of first refusal on HTIL's stake, which the Hong Kong company is selling to Vodafone.
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