15th Mar 2007 08:00
Vodafone Group Plc15 March 2007 15 March 2007 VODAFONE AND ESSAR AGREE PARTNERSHIP TERMS Vodafone and Essar have reached an agreement under which they will work tocontinue the growth of Hutchison Essar Limited ("Hutchison Essar"), one ofIndia's leading mobile operators. This follows Vodafone's announcement on 11February 2007 that it had agreed to acquire Hutchison TelecommunicationsInternational Limited's ("HTIL") controlling interest in Hutchison Essar, inwhich Essar is and will continue to be a 33% shareholder. The partners have agreed that Hutchison Essar will be renamed Vodafone Essarand, in due course, that the business will market its products and servicesunder the Vodafone brand. With penetration levels of around 13%, both partners believe that there aresubstantial growth opportunities in the Indian mobile telecommunications market.Vodafone is the leading international mobile operator with an extensive range ofproducts and services, many of which are not currently available in India. Essaris a major industrial group with a deep understanding of India and the Indianmobile telecommunications industry. With these complementary strengths Vodafoneand Essar plan to broaden Vodafone Essar's service offering and enable it tobecome the leader in the Indian mobile telephony market. Commenting on the new partnership, Arun Sarin, Chief Executive of Vodafone said: "I am delighted that Essar and Vodafone have agreed the terms of an ongoingpartnership. Essar has played a key role in transforming this business into aleading Indian mobile operator. We look forward to leveraging this experienceand working with our partner as the company enters its next phase of growth inthe attractive Indian telecommunications market. We will be bringing therelevant range of Vodafone products and services to the Indian consumer." Ravi Ruia, Vice Chairman of Essar, added: "It is terrific that we are joining with the world's leading internationalmobile company. I welcome them as our partner into this successful businesswhich we will now take forward to the next level. Essar was a founding partnerin Hutchison Essar and played an active role in building the company, includingextending network coverage into several profitable regional markets. Bypartnering with Vodafone we expect to create further value in the business." Under the terms of the partnership, Vodafone will have operational control ofVodafone Essar and Essar will have rights consistent with its shareholding,including proportionate Board representation. Ravi Ruia will be appointed byVodafone as Chairman of Vodafone Essar and Arun Sarin will be appointed by Essaras Vice Chairman. Essar will have certain liquidity rights including, between the third and fourthanniversaries of completion, and subject to regulatory requirements, an optionto sell its 33% shareholding in Vodafone Essar to Vodafone for US$5 billion oran option to sell between US$1 billion and US$5 billion worth of Vodafone Essarshares to Vodafone at an independently appraised fair market trading value. Vodafone expects to complete the acquisition of HTIL's interest in HutchisonEssar in the coming weeks. - ends - For further information: Vodafone Group Investor Relations Media RelationsTelephone: +44 (0) 1635 664 447 Telephone: +44 (0) 1635 664 444 Essar Global Media RelationsTelephone: Manish Kedia: +91 9819730092 or B Ganesh Pai: +91 9819730225Or William Clutterbuck, Maitland: +44 20 7379 5151 or +44 7785 292 617 Notes to Editors About Vodafone Vodafone is the world's leading international mobile communications group withoperations in 25 countries across five continents and over 200 millionproportionate customers by the end of January 2007, as well as 36 partnernetworks. For further information, please visit www.vodafone.com. About Essar Essar is one of India's large corporate houses with 20,000 staff and businessinterests spanning high growth infrastructure sectors of steel, oil & gas,power, telecommunications, shipping & logistics and construction. The group hasbuilt a portfolio of assets with expected revenues of US$10 billion in the yearto March 2008. About Hutchison Essar Hutchison Essar, which will be renamed Vodafone Essar, is a leading Indiantelecommunications mobile operator with 25 million customers currently,representing a 16.4% national market share. Hutchison Essar has over 6,000employees, operates in 16 circles and has licences in an additional six circles.In the year to 31 December 2005, Hutchison Essar reported revenue of US$1.3billion, EBITDA of US$415 million, and operating profit of US$313 million. Inthe six months to 30 June 2006, Hutchison Essar reported revenue of US$908million, EBITDA of US$297 million, and operating profit of US$226 million. Up until January 2006, Hutchison Essar had licences in 13 circles, of which ninehave 900 MHz spectrum. In January 2006, Hutchison Essar acquired BPL MobileCellular Limited, thereby adding three circles, each operating with 900 MHzspectrum. In October 2006, Hutchison Essar acquired Spacetel, adding six furtherlicences, with operations planned to be launched during 2007. The results of Hutchison Essar are prepared in accordance with Hong KongFinancial Reporting Standards which may differ in material respects from theaccounting principles applied by Vodafone. Important information All company data relating to Hutchison Essar is derived from publicly availableinformation about Hutchison Essar. Financial information for the year to 31December 2005 and half year to 30 June 2006 has been translated using anexchange rate of US$1:HK$7.8. Market data is based on information from the Cellular Operator Association ofIndia ("COAI") and the Association of Unified Telecom Service Providers of India("AUSPI"). Other matters This press release contains certain "forward-looking statements" within themeaning of the Private Securities Litigation Reform Act of 1995 with respect toour expectations and plans, strategy, management's objectives and futureperformance, including statements relating to expected benefits associated withthe transactions contemplated herein. Forward-looking statements are sometimes,but not always, identified by their use of a date in the future or such words as"aims", "plan", "enable", or "expects". By their nature, forward-lookingstatements are inherently predictive, speculative and involve risk anduncertainty because they relate to events and depend on circumstances that willoccur in the future. There are a number of factors that could cause actual results and developmentsto differ materially from those expressed or implied by these forward-lookingstatements. These factors include, but are not limited to: regulatory approvalsthat may require acceptance of conditions with potential adverse impacts; riskinvolving our ability to realise expected benefits associated with thetransactions referred to herein; the impact of legal or other proceedings; andthe risk that, upon completion of the acquisition of the controlling interest inHutch Essar, we discover additional information relating to its business leadingto restructuring charges or write-offs or with other negative implications. In addition to the factors noted above, please refer to documents Vodafone GroupPlc has filed with, or otherwise furnished to, the US Securities and ExchangeCommission (the "SEC") under the US Securities Exchange Act of 1934, includingthe Annual Report on Form 20-F for the year ended 31 March 2006 and subsequentlyfurnished Form 6-Ks (which are available at the SEC's Internet site (http://www.sec.gov), for additional factors, risks and uncertainties that could causeactual results and developments to differ materially from the expectationsdisclosed or implied within the forward-looking statements made herein. Noassurances can be given that the forward-looking statements in this release willbe realised. All written or oral forward-looking statements attributable toVodafone Group Plc, any members of Vodafone Group or persons acting on ourbehalf are expressly qualified in their entirety by the factors referred toabove. Vodafone Group Plc does not undertake, and specifically disclaims, anyobligation to update or revise these forward-looking statements, whether as aresult of new information, future developments or otherwise. This information is provided by RNS The company news service from the London Stock ExchangeRelated Shares:
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