Orascom willing to bid for Hutch, too

But Egyptian company wants clear green signal from government

Even as Anil Ambani’s Reliance Communications is seen as a frontrunner for a crack at Hutchison Essar, don’t rule out the possibility of the company staying within the fold of its existing set of promoters.

While the Ruias of Essar are said to working on a plan to bid for Hutchison Telecommunication International’s (HTI’s) 67% stake in the Indian mobile services company, Orascom Telecom says it may be willing to throw its hat in the ring if the government makes it clear that it is welcome to do business in the country. Replying to a media query on Saturday, Orascom CEO Naguib Sawiris, who’s in India as part of a high-level Egyptian delegation, indicated that the company is open to the idea of putting a bid for Hutchison Essar assets once such as assurance is given.

As reported earlier, Hutchison Essar is learnt to be actively considering takeover offers from potential candidates. Apart from Ambani, those in play include Malaysia’s Maxis.
Orascom’s indirect stake of 10% in Hutchison Essar has been a controversial issue in India, as the company has a significant operation in Pakistan. National security concerns were raised in India due to Orascom’s presence in Pakistan. Orascom holds 19.3% in Hong Kong-based Hutchison Telecom, and that translates into an indirect stake of 10% in the Indian telecom venture of Hutchison Essar.

After meeting with political leaders, including foreign minister Pranab Mukherjee and defence minister AK Antony, here on Saturday, Egyptian foreign minister Ahmed Aboul Gheit and Orascom’s Sawiris told the media that they believe that the Indian government is committed to transparency and fairplay.

On the possibility of Orascom having a direct stake in Indian businesses, including Hutchison Essar, in the near future, the Egyptian foreign minister’s reply was, “why not”. The Orascom CEO argued that “we cannot be punished for doing business in Pakistan”. As for having a direct investment in India, like picking up a significant stake in Hutchison Essar, Sawiris said, “we need a statement from the government” that will assure Orascom of fairplay in the country.

PTI adds: Sawiris expressed concern and surprise at his company being termed as a security threat in India and said that “a country which is looking for $300-400 billion investment should not club security with investments”. “It is a dangerous mix. Our company is no security hazard to India. The fact is that the asset here (Hutch-Essar) is managed by Indians. When you have $10-15 billion of investments in this country, by virtue of that you become a protector of this country.

Asked about the Indian joint venture partner Essar, which had written to the government about Orascom being a security threat, Sawiris said: “I understand their position. They (Essar) felt bad because they thought they were not consulted before we came on board. I am open to meeting Essar officials for clearing their apprehension.”