HTIL set to ring the bell for Hutch

Hutch Telecom International Ltd (HTIL) is all set to formalise the bid process for sale of Hutch Essar, following its board meeting on January 29. So far, Hong Kong-based HTIL, which owns 67% along with its associates in Hutch Essar, has only announced it has been approached by several players expressing interest to buy India’s fourth largest mobile operator. In its announcement made on December 22, HTIL had said that “there’s no assurance that a sale may result from these approaches”.

But since then, much has transpired on Hutch Essar sale. And HTIL has now decided to take up the issue at its board meeting on Monday, according to a source close to the development. For the first time, an announcement on the sale is expected, the source added. While this week many of the potential bidders for Hutch Essar are busy networking in Davos during the World Economic Summit, by early next week, all the action may shift to Hong Kong.

As of now, the world’s largest mobile service provider, UK-based Vodafone, is still the frontrunner in the race, but competition is intense for acquiring Hutch Essar. Among the new entrants eyeing Hutch Essar is Russia’s Altima, from the Alfo group. Interestingly, Altima’s name has come up at a time when Russian President Vladimir Putin is on a visit to India. It is believed that Altima is keen on a minority stake in Hutch Essar, and may strike a venture either with Essar or the Hinduja group, which are being named as the other two potential bidders for the asset. Essar holds 33% in Hutch Essar. Essar officials did not comment on the matter.

Anil Ambani-controlled Reliance Communications is also understood to be a potential player in the race for Hutch Essar. Also in the fray are Malaysia’s Maxis and Egypt’s Orascom. Maxis officials did not respond to a question on whether the company is still in the race or not. Orascom Telecom CEO Naguib Sawiris told that a decision on buying would be taken, depending on how high the offers go. Orascom Telecom, with about 20% in HTIL, prefers to increase its stake in HTIL, rather than directly invest in Hutch Essar. Orascom aims to be among the top 10 telecom operators in the world.

Various players, including Vodafone and Reliance Communications, have already indicated their initial non-binding offers to HTIL, it is believed.

For HTIL’s 67% stake, companies have offered up to $17 billion, it is learnt. However, no formal bids have been offered so far. An HTIL official had indicated recently nothing less than $22 billion would be acceptable to the company for 100% in Hutch Essar.