Vodafone open to increasing stake in Essar JV

NEW DELHI, INDIA: Vodafone, which is in a battle with the tax authorities in India, is financially ready to pick up equity, the British telecom operator's chief executive said in published comments on Wednesday, when asked about interest in increasing its stake in its Indian telecoms joint venture with Essar Group.

"While they have to do what is in their best interest, Vodafone is financially in a position to pick up equity. This will depend on their choice and strategy," Vodafone chief executive Vittorio Colao told The Times of India.

In 2007, Vodafone bought a controlling stake in Hutchison Whampoa Ltd's mobile business in India, in which Essar had been a partner.

Essar, which owns 33 per cent of the venture that was since named Vodafone Essar, has an option to sell its entire stake to Vodafone for $5 billion by May 2011.

Vodafone currently owns 67 per cent in the venture and Indian rules restrict foreign holding in telecoms firms at 74 per cent.

"We will also have to study the 26 per cent Indian ownership part," Colao was quoted as saying.