(The Times of India via NewsEdge) Telecom industry analysts say that regulations will make it tough for large domestic telecom companies to buy out Hutchison Essar.
Under government the regulations, an existing telecom company in any given circle can acquire only up to 10% stake in another player in the same circle or alternatively, acquire 100% of rival business.
The Ruia's hold 33% stake in Hutchison Essar, while parent Hutchison Telecom holds nearly 50%.
The balance is held by handful of individual shareholders including Hutchison Essar managing director Asim Ghosh and Max group's Analjit Singh and a clutch of investment companies.
So far, the Essar's have shown no inclination to sell their stake in the joint venture.
A local telecom company will have an option of buying only up to 10% in Hutchison Essar as they won't be able to consolidate Essar's stake.
There are reports that Anil Ambani ADAG group has begun talks with US private fund Kohlberg Kravis Robers & Co to bid for Hutchison Essar.
It is also not clear if Essar will also have to own 100% stake in Hutchison Essar, as it runs BPL's telecom business in the Mumbai circle.
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