Essar group is in talks with international bankers to raise about $5 billion (over Rs 20,000 crore) by leveraging its 33 per cent stake in Hutch-Essar, the country's fourth-largest mobile player in which UK's Vodafone recently acquired majority stake.

The borrowing would be made by Essar Global, the overseas arm of Essar Group, and the funds would be used for financing the recent acquisitions of steel plants in Trinidad and Tobago, Canada, USA and building power plants.

Essar Group, through its domestic companies and global subsidiary, may require about $8 billion (over Rs 32,000 crore) to fund the acquisitions and expansion into power sector, sources said.

An Essar spokesperson declined to comment on company's plans to raise funds. Essar owns 33 per cent stake in Hutch-Essar, in which Vodafone bought the stake of Hutchison Telecom International for $10.9 billion.

Essar had negotiated with Vodafone to sell its stake to Vodafone for up to $5 billion, subject to regulatory approvals.

"Essar will have certain liquidity rights including, between the third and fourth anniversary of completion, and subject to regulatory requirements, an option to sell its 33 per cent stake in Vodafone-Essar to Vodafone for $5 billion," the two companies had recently said.

On this basis, Essar is negotiating a lower rate of interest for raising up to $5 billion from overseas market, the sources said.

The race for Hutch-Essar