Hutch Reorganizes Essar
HONG KONG -- Hutchison Telecommunications International Limited (''Hutchison Telecom''; SEHK: 2332; NYSE: HTX) announced today that it is simplifying the shareholding structure of its joint venture companies with the Kotak Group (''JV Companies''), which hold approximately 19.5% equity interest in Hutchison Essar Limited (''Hutchison Essar'').
The simplified structure is an important step to prepare for a potential listing of Hutchison Essar and conforms to India's new regulations on foreign direct investment in mobile telecommunications operators in India. The reorganisation also takes place following the Kotak Group's decision to dispose of its indirect interest in Hutchison Essar.
The key aspects of the reorganisation are:
- Mr Analjit Singh has rejoined Hutchison Essar as a partner by acquiring the Kotak Group's indirect stake in Hutchison Essar. Mr Singh, the founder and former Chairman of Hutchison Max, is a pioneer in Indian mobile telephony.
- Mr Asim Ghosh, Managing Director of Hutchison Essar, has been offered and has accepted an opportunity to become an indirect shareholder through an investment in one of the JV Companies.
- The JV Companies are reorganising their aggregate ownership of the approximate 19.5% interest in Hutchison Essar, leading to one joint venture company (''JV Company'') indirectly owning all 19.5% interest in Hutchison Essar. Following the reorganisation, Hutchison Telecom owns 37% of the JV Company, Messrs Singh's and Ghosh's companies own 39% and 24% respectively of the JV Company.
- Hutchison Telecom has established a close strategic partnership with Messrs Singh's and Ghosh's companies and has certain rights to invest in those companies in the future subject to certain conditions.
- Hutchison Telecom nominates up to six of Hutchison Essar's 11 directors, compared with five previously.
Mr Canning Fok, Chairman of Hutchison Telecom, said: "I am delighted that Analjit Singh as the original founder has once again decided to invest in the company at such an exciting stage of development for Hutchison Essar."
"I am also delighted to welcome Asim Ghosh now as a shareholder as well as the Managing Director of Hutchison Essar. Asim has built this business as one of the leading mobile operators in India. It is only fitting that Asim continues and extends his involvement through this investment," Mr Fok added.
"It has been a privilege to work with the Kotak Group over these last eight years, and I would like to thank Uday Kotak, Kotak Group's Executive Vice Chairman and Managing Director, for being a supportive partner in building the business," Mr Fok said.