Essar doesn't want more money, honours Vodafone call option

Days after Essar's lawyers argued with Vodafone counsel at the Madras HC, sources said that Essar is committed to its contractual obligations and will honor the call option for the 10.97% stake in Vodafone Essar Ltd (VEL). It also expects Vodafone to fulfill obligations under the pact.

The company is not looking for more money for exiting its mobile phone joint venture with Vodafone and has already applied to the Reserve Bank of India seeking permission to transfer these shares for USD 1.2 billion in terms of the call option exercised by Vodafone, a source with direct knowledge of the matter said.

Until this transaction is concluded which is expected by the end of November, Essar will continue to be a shareholder and retains its rights under its agreement with VEL.

Vodafone announced a deal last month to pay a predetermined price of USD 5 billion to buy Essar out of Vodafone Essar to give it direct ownership of 75% of India's third-biggest operator and bring an end to their fractious relationship.