India Securities has been informed by Essar Telecommunications Holdings (ETHPL) that its wholly owned subsidiary, ETHL Communications Holdings (ETHL CHL), has exercised its prepayment option in relation to the Series A and Series B Non Convertible Debentures (in accordance with the terms of issue). The payment towards the redemption would be made on March 29, 2011.
Accordingly, post payment the 10.97% stake in Vodafone Essar held by ETHL CHL will be free from all encumbrances.
India Securities is promoted by Essar (Ruia) group and is a subsidiary of Essar Investments. It is into the business of finance, corporate advisory services, project finance, intermediation services project money and foreign exchange markets.
ETHPL holds 11 per cent stake in Vodafone Essar, while the remaining 22 per cent is held through Essar Telecom. Vodafone owns the rest. Vodafone paid $11.1 billion in 2007 for a 67% stake in the firm.
The deal gave Essar the option to sell its entire 33% stake for $5 billion by May 2011, or part of it at a market-determined price. Vodafone has an agreement with Essar that gives it first option to buy out the Indian company’s stake if some or all of the holding is put up for sale. The decision to exercise either put option on or before 8 May, 2011, is entirely the choice of both companies.
Last year in June India Securities (ISL) had said that its board had approved the merger of Essar Telecommunications, which owns an indirect 11 percent stake in Vodafone Essar. Vodafone objected to Essar Telecommunications Holdings' reverse listing into India Securities (ISL) saying ISL's value may be inaccurately used to calculate the value of its Indian telecom joint venture Vodafone Essar.
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