FIPB clears Vodafone Essar stake transfer

20 Sep 2011

India’s Foreign Investment Promotion Board (FIPB) has reportedly cleared the acquisition of a 5.48% stake in mobile network operator Vodafone Essar by its majority owner, British mobile giant Vodafone Group. According to India’s Economic Times, Vodafone Group’s proposed purchase of the holding from two Mauritius-based entities – Essar Communications and Essar Com Ltd – has been given the nod, with India’s Ministry of Finance saying of the deal: ‘Since the transaction is between non-resident (firms) to non-resident, there is no foreign equity inflow.’ Under the terms of the deal the 5.48% holding will be transferred from the two aforementioned Mauritius-based companies to Euro Pacific Securities, an indirect subsidiary of Vodafone Group which is also located on the African island nation.

The FIPB has, however, reportedly deferred a decision regarding a separate request from Vodafone Essar regarding the ‘transfer of shares from [a] resident (firm) to [a] non-resident (entity) to carry out the activities relating to telecommunication.’ It is understood that one of Vodafone Group’s Mauritian indirect subsidiaries had approached the FIPB for permission to acquire a stake in Vodafone Essar.

India, Vodafone Group, Vodafone India