Vodafone to buy out it's India partners Analjit Singh, Piramal Enterprises for Rs 10k crore
Vodafone Group Plc will pay Analjit Singh Rs 1,241 crore and Piramal Enterprises Rs 8,900 crore for their stakes in Vodafone India.
|, ET Bureau
Updated: Dec 06, 2013, 04.03 AM IST
NEW DELHI: Vodafone Group Plc will pay Analjit Singh Rs 1,241 crore and Piramal Enterprises Rs 8,900 crore for their stakes in Vodafone India as part of a proposal by the British telecom major to fully own its domestic unit, according to telecom department documents seen by ET.
The Foreign Investment Promotion Broad is scheduled to consider on Friday Vodafone Group's proposal to increase its stake in Vodafone India to 100% by paying Rs 10,141 crore. The department of telecommunications (DoT) had approved the proposal on December 3, subject to approvals from the finance and the home ministries, as they noted a difference in the valuation of Piramal Enterprises' 10.97% holding compared with Analjit Singh's 24.65% in Vodafone India.
"From the valuation, it has been observed that while valuation of 10.97% held in Vodafone India by Piramal Enterprises is Rs 8,900 crore, valuation of 24.65% held by Scorpio Beverages Pvt Ltd (SBP) is only Rs 1,241 crore," the DoT noted, according to the documents. Singh, Vodafone India's non-executive chairman, holds his stake through Scorpio Beverages.
The note says, "since valuation of shares is subject matter of department of revenue, department of economic affairs and the foreign investment promotion board, as such our comments are subject to valuation of shares by the three above".
The telecom department has also kept its approval contingent on the outcome of the Delhi High Court case on whether the shares held by Asim Ghosh, Analjit Singh and IDFC were "benami".
A non-governmental organisation (NGO) had filed the case involving the department of economic affairs (DEA) alleging that IDFC, Ghosh and Singh held "benami" shares in Vodafone India. The allegation implies that the three held shares in Vodafone India on behalf of Vodafone Group Plc. The named individuals and the company have denied any wrong doing.
"With this proposal, these shares are being bought by M/s CGP Mauritius. In this case also, it is to state that the licensee has to comply with the court judgment," DoT has said, as per the document.
At present, the British telecom major holds 64.38% stake in Vodafone India directly. It has proposed to hike its stake through CGP, an indirect shareholder in Vodafone India and an indirect Mauritius subsidiary of Vodafone International Holdings (VIBHV).
Under the proposal, CGP would purchase 19,50,05,079 equity shares of SBP , a company which holds an indirect stake in VIL, constituting 51% of the equity shares of SBP from Analjit Singh and his wife, Neetu Singh.
The transaction also proposes to buy out the 10.97% stake of Piramal Enterprises.
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