Essar Group to raise Rs 45 billion by pledging stake in Vodafone Essar

The Essar Group plans to raise up to Rs 45 billion by monetising its shareholding in Vodafone Essar. By pledging 11 per cent of the group’s stake in Vodafone Essar, ETHL Communications Holdings (the wholly owned subsidiary of Essar Teleholdings), will issue non-convertible debentures to raise Rs 22.5 billion, with the option to raise an additional Rs 22.5 billion depending on investor interest. The instruments will carry a yield of 8.5-9.75 per cent with maturity in July and December 2011. Through this transaction, the Essar Group will pledge the whole of its 33 per cent holding in Vodafone Essar. In 2007, it had pledged 22 per cent stake held through two Mauritian entities, Essar Telecom Investments (15.85 per cent) and Essar Communications (6.19 per cent), to raise $3.6 billion.