Orascom talks with Hutch for further stake fail
Egypt-based Orascom Telecom Holding’s attempt to increase its presence in the booming Indian cellular market has failed, with its negotiations for merger with Hutchison Telecom International Ltd ending without success.
Orascom had earlier picked up 23 per cent stake in Hong Kong-based Hutchison Telecom, which gave it about 10 per cent equity share in Indian cellular venture, Essar Hutchison.
Orascom had expressed interest in picking up 100 per cent stake in Hutchison Telecom, which has not been agreed to by Hutchison officials.
The company had told Business Line that it was looking to increase its stake in Essar Hutchison by hiking its holding in Hutchison Telecom.
Mr Naguib Sawaris, Chairman of Orascom, had said that the company was interested in increasing its presence in the booming Indian market through this route, as its attempts to find a local partner had failed.
The failure would come as a relief to the Essar Group, which had objected to Orascom’s entry into the Essar-Hutchison venture.
The Essar Group had said that its consent had not been obtained before the international deal between Orascom and Hutchison took place, which gave the Egyptian company 10 per cent stake.
Essar had said that such international deals could bring in investments from companies in unfriendly countries.
Some of the security agencies had also expressed concerns with investment.
The Government, however, had given its approval to the investment.
The FDI level in Hutchison Essar is currently at 74 per cent, which rules out any fresh FDI unless an existing foreign equity holding firm decides to dilute its share.
Mr Sawaris had earlier said: "We decided to invest in Hutchison Telecom because it has operations in countries such as India and Vietnam, where we had failed to make an entry due to local circumstances. We are hoping that Hutchison would agree to gives us more equity in the company."
Negotiations between the two companies have now ended.
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