Essar turns non-serious on telecom; to focus on steel, oil, power

Essar-owned BPL Mobile, Mumbai has become a prized asset owing to its rich spectrum and 10.6 lakh subscribers. It may command a price of Rs. 20,000 per subscriber valuing it at Rs. 2,000 crores. Essar would not like to merge it with Vodafone Essar as the merged entity would have to return the spectrum allocated (max. permitted to single player is 15MHz).

Essar is also planning to raise Rs. 20,000 crores from the overseas loan market at a cheaper rate by leveraging its 33% stake in Vodafone Essar. It can exercise a put option to sell its 33% stake to Vodafone for $5 billion in 3-4 years.

Essar is investing heavily in building, expanding and buying out steel and power plants both domestically and overseas. The company is taking a less trodden path by shifting focus from sunrise sectors to the brick and mortar business.

Via: The Economic Times / Moneycontrol.com