The Vodafone Group has sold 5.5 per cent of the issued equity share capital of Vodafone Essar Limited from Essar Telecommunications Holdings Private Limited to Piramal Healthcare for $640 million.
The transaction follows the settlement between Vodafone and Essar over the sale of the latter?s approximately 33 per cent stake in Vodafone Essar, which was announced on 1 July 2011.
The transaction contemplates various exit mechanisms for Piramal, including both participation in Vodafone Essar?s proposed initial public offering and a sale of its stake to Vodafone.
Prior to this, Vodafone had said that it would pay $5.46 billion, as against $5 billion decided earlier, for purchasing 33 per cent stake from Essar in Vodafone Essar. After purchasing Essar’s 33 per cent stake, Vodafone’s stake in Vodafone Essar would rise to 75.35 per cent, exceeding the FDI limit of 74 per cent.
Vodafone had said that it would transfer 1.35 per cent stake to an Indian investor to remain compliant with the telecom sector?s existing FDI norms. In early 2011, Vodafone had objected to Essar’s plans to transfer 11 per cent stake, held by ETHL, to another listed group firm India Securities Limited. Essar’s plan was aimed at ascertaining the market value of its stake in Vodafone Essar.
