HTIL shareholders to vote on Essar fee

NEW DELHI: Shareholders of Hutchison Telecom would on May 8, vote on a proposal to pay Essar group 415 million dollar to ensure smooth transaction with UK's Vodafone for sale of majority equity in Hutch-Essar -- foreign holding in which is a matter of debate with Indian regulators.

However, HTIL has made it clear that the settlement fee would not be paid until after the completion of the deal with the UK mobile operator.

HTIL had agreed on March 15 to pay Essar Group 415 million dollar (Rs 1,865 crore) to ensure its smooth exit from the Indian venture.

Under the settlement agreement, Essar would take all steps to ensure completion of the transaction and would refrain from initiating any action that may inhibit or delay the transaction, HTIL said in a statement.

HTIL said in a circular sent to its shareholders today that the board and Somerley Ltd, the independent adviser on the settlement agreement, are recommending to vote in favour of the payment at an Extraordinary General Meeting to be held on May 8.

Hutchison Whampoa Ltd, the parent company with a 49.76 per cent stake, has given irrevocable undertaking to Essar Group to vote in favour of the resolution to be proposed to the shareholders at the EGM on settlement agreement, it added.

As per the settlement, HTIL would pay 373.5 million dollars immediately following completion of deal with Vodafone or if later, within two business days of getting independent shareholders approval.

Remaining 41.5 million dollar would be paid within two business days after second anniversary of completion of the transaction.