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Essar seeks joint control with Voda in India

Reports are emerging that India’s Essar Group wants to run mobile operator Hutchison Essar in a partnership of equals with Vodafone.

The Indian conglomerate issued a statement late Friday in which it said it sees Hutch Essar “as a core part of its business portfolio for the long term” and “has no intent to exit the company”.

Essar has confirmed that Vodafone has approached the group with regards to a possible partnership over the running of the company and some local press reports state that Essar is open to increasing its existing stake beyond 33 per cent to run the operator on an equal footing with Vodafone.

Vodafone agreed terms with Hutchison Telecoms International (HTIL) to buy out its 67 per cent controlling stake in Hutch Essar for $11.7bn earlier this month.

Vodafone then offered to buy Essar out on the same terms as Hutchison but Essar appears keen to maintain its interest in the company.

In fact, speculation suggests that if Vodafone refuses Essar’s proposal for joint management, Essar may exercise its right of first refusal. This is a much debated option that could allow Essar to buy the 67 per cent stake from HTIL at the same price offered by Vodafone.

However there is some controversy over whether the first right option will stand up in court.

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