Battle for Hutch-Essar hots up

Reliance Communication, an Anil Ambani group company, Malaysia's Maxis and Egypt's Orascom are believed to be vying for acquiring India's third largest private mobile service provider Essar-Hutch, valued at an estimated $13-14 billion.

While there was no formal word from any of the interested players, discussions are on between the bidders and Hutchison's advisor Goldman Sachs for the deal that could become clear within a month, investment banking sources said.

Reports about the race between the three players for Hutch-Essar coincides with the arrival of Orascom's Chief N Sawiris to India along with Egypt's Foreign Minister AA Gheit, who will meet External Affairs Minister Pranab Mukherjee here on Saturday.

Reliance Communication, partnering four global equity funds -- Blackstone, Texas Pacific Group, KKR and Carlyle -- who collectively manage about $100 billion worldwide, is understood to be keen for a majority stake for which it has tied up its resources.

Reliance Communication, with cash reserves of $1.7 billion, raised another $1 billion as external loans from the international market and has appointed UBS as advisor for raising further debts and financial resources for its bid.

A spokesperson of Essar, which has a 33 per cent stake in the Joint venture, said that, "we do not comment on speculation," while Essar-Hutch Managing Director Asim Ghosh did not take questions on the subject.

Malaysia's Maxis, headed by Anand Krishnan, which has a majority stake in another telecom operator Aircel in India, is understood to have engaged Standard Chartered as its adviser.

Sandip Das, the number two executive in Hutch Essar had quit earthy this month to take charge of Maxis Malaysia as its CEO.

Orascom, which has more than 19 per cent stake in Hong Kong-based HTIL, owning 67 per cent stake in the Indian venture, is understood to have appointed Deutsche Bank as its adviser.

Orascom had been in news recently with intelligence agencies raising security concerns about its part holding in Hutch-Essar as it was a telecom service provider in Pakistan.

Essar is understood to have told its joint venture partners that it would not be averse to exit from the venture if the valuation was right.

Hutchison adviser Goldman Sachs is understood to be dealing with the three bidders and is believed to have communicated that a decision could taken in the next few weeks, investment banking sources said.

No official comment could be obtained from either the bidders or their advisers.