Hutchison Telecom International Ltd, the Hong-Kong based parent of Hutchison that operates the Hutch-Essar JV in India with Essar group, has said the termination of BPL Mobile Mumbai circle merger deal by its Indian partner was wrong.
"The BPL Mumbai vendors have failed to undertake completion and on August 1, each of the BPL Mumbai vendors issued a notice to Hutchison-Essar purporting to terminate the BPL Mumbai Share Purchase Agreement.
"Hutchison Essar considers the BPL Mumbai vendors to be under an obligation to undertake completion and the attempt to terminate BPL Mumbai Share Purchase Agreement to be wrongful.
Hutchison Essar is taking necessary steps and action to pursue completion in accordance with the terms of BPL Mumbai Share Purchase Agreement", the company said in an update to its shareholders on the status of the merger, shortly before dragging Essar to court over the matter.
Referring to its announcement of September last year about acquisition of BPL Mobile's Mumbai business, the company said the fruition of the SPA would have enabled Hutchison to have 100 per cent stake in BPL's Mumbai circle.
Since the announcement and the circular, Hutchison-Essar has completed its acquisition of the entire issued share capital of BPL Cellular (a licensee for GSM mobile services in the telecommunication circles of Maharashtra, Tamil Nadu, and Kerala in India), while the BPL Mumbai SPA was signed in December last year.
Since the signing of agreement, further payments have been made to the BPL Mumbai Vendors, which when aggregated with the BPL Mumbai Initial Deposit amounted to approximately Rs 1,600 crore or Rs 16 billion) representing substantially all of the BPL Mumbai Consideration".
It said the parties to BPL Mumbai Share Purchase Agreement subsequently agreed to extend the date for satisfaction or waiver of all relevant conditions precedent to completion of the BPL Mumbai Acquisition (Completion), from June 30 to July 31.
On the day of deadline, Hutchison-Essar issued a notice to the BPL Mumbai vendors notifying them that all conditions precedent to completion had been fulfilled and satisfied to be waived for the purposes of Completion and called upon the BPL Mumbai vendors to undertake completion on July 31.
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