Hutchison Telecom reorganises India JV before IPO

HONG KONG: Hutchison Telecommunications International Ltd. said on Thursday it has simplified the shareholding structure of its joint venture with India's Kotak Group to prepare for its planned IPO.

Hutchison Telecom, the emerging markets cellphone arm of Hong Kong tycoon Li Ka-shing's Hutchison Whampoa Ltd., directly holds a 42.34 percent stake in Hutchison Essar Ltd., its Indian wireless arm, under the new structure, a Hutchison official said.

After the reorganisation, Hutchison Telecom's indirect stake in Hutchison Essar was 7.28 percent, bringing its interest in the carrier to 49.62 percent. India's diversified Essar Group holds 33 percent in Hutchison Essar, the official said.

Shares in Hutchison Telecom were up nearly 6 percent to HK$12.40 in Thursday morning trade.

"The simplified structure is an important step to prepare for a potential listing of Hutchison Essar and conforms to India's new regulations on foreign direct investment in mobile telecommunications operators in India," Hutchison Telecom said in a statement.

Indian private sector lender Kotak Mahindra Bank Ltd. has said it sold its stake in Hutchison Essar Ltd., valuing the cellular operator at $6 billion.

Kotak sold 8.3 percent of the company for 10.19 billion rupees ($230 million) to entrepreneur Analjit Singh, Hutchison's original joint venture partner in its telecom business in India.

Hutchison, which has been planning an IPO for its Indian unit since last year, is clearing regulatory issues with the government concerning how much a foreign entity can own in an Indian carrier.

The government now allows foreign firms to own up to 74 percent of an Indian carrier.

At the Reuters Global Technology, Media and Telecoms Summit in Hong Kong on Wednesday, Canning Fok, Hutchison Whampoa's managing director, said: "There is every intention for us to go IPO, subject to market conditions. This year will be a safe bet."