Hutchison Essar South Limited

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In 2001, Hutchison Essar South Limited (HSEL) was awarded a license to operate the fourth mobile network in the three southern circles of Chennai, Andhra Pradesh and Karnataka. HSEL paid Rs 46,883 lakhs (US$ 97.3 million) to Department of Telecommunications (Government of India) upfront as license fees for the three circles. In 2003, HESL bought Escotel’s Punjab license. In March 2004, HSEL acquired the mobile license for Uttar Pradesh West for Rs 3000 lakh (US$ 6.8 million). HSEL also obtained the license to serve West Bengal region. In October 2001, the sponsors of HESL tied up loan worth Rs 102,100 lakh (US$ 217 million) from GE Capital Services India and HSBC India. The loan was usesd for investments in the for launching the cellular network in the three southern circles. The project cost was expected to be Rs 107,400 lakh (US$ 228 million). HESL is a joint venture and is owned by Hutchison Telecommunications International Limited (74 percent), Essar Group (25 percent) and Kotak Mahindra Group (1 percent). In February 2005, Hutchison Telecom and Essar Group consolidated all their mobile operations in India into their Mumbai subsidiary Hutchison Max Telecom Limited. HMTL became the holding company of Fascel Limited, Hutchison Telecom East Limited, Hutchison Essar Telecom Limited, and Hutchison Essar South Limited. After the consolidation, Hutchison Telecommunications International Limited (subsidiary of Hutchison Whampoa Limited) had 42.34 percent ownership in HMTL. The other shareholders of HMTL were Essar group (26.42 percent), the Kotak Mahindra Group (22.97 percent), the Hinduja Group (5.11 percent) and Max India (3.16 percent). The consolidation was in preparation of an initial public offering of their telecom operations in India. HMTL was expected to be renamed Hutchison Essar Limited. In February 2005, Hutchison Group consolidated all its mobile operations in India into its Mumbai subsidiary Hutchison Essar Limited (HEL), formerly called Hutchison Max Telecom Limited (HMTL). As of June 2006, Hutchison Telecommunications International Limited (HTIL), subsidiary of Hong Kong’s Hutchison Whampoa Group, had 67% equity stake in HEL and the balance was held by India’s Essar Group. None None