Vodafone and Essar are no closer to resolving their long-running dispute, with both sides hiring separate investment banks to examine the value of the Indian firm’s stake in the joint venture.
Vodafone is furious that Essar is planning to merge one third of its 33 per cent stake in the joint venture into public listed company India Securities. Vodafone believes the move might be a ploy to artificially inflate the stake’s value as a precursor to selling it, with Essar saying it will reveal its true value.
When Vodafone acquired a 67 per cent stake in Vodafone Essar for $11.1bn (£6.85bn)?in 2007, it gave Essar two options over its stake. The first allows it to sell the entire stake to Vodafone for $5bn. The second allows Essar to sell between $1bn and $5bn worth of Vodafone Essar shares at a “fair market value”.
Essar says it plans to press ahead with its plans for the stake despite Vodafone’s objections.