Government clears Vodafone's acquisition of overseas stakes in Essar JV

The government has approved Vodafone's acquisition of 5.48-per cent stake in its joint venture with the Essar group, Vodafone-Essar, from two Mauritius-based entities.

"Since the transaction is between non-resident and non-resident, there is no foreign equity inflow," the finance ministry said in a statement.

The transaction involves transfer of shares worth Rs2,700 crore of Vodafone Essar from Mauritius-based Essar Communications and Essar Com Ltd to Euro Pacific Securitie, an indirect subsidiary of Vodafone International Holdings BV in Mauritius.

The Foreign Investment Promotion Board (FIPB) under the finance ministry cleared the transaction based on information provided by the company and inputs from a committee headed by a senior government official, according to an official statement.

The FIPB, however, deferred a decision on another request of Vodafone-Essar to "transfer of shares from resident to non-resident to carry out the activities relating to telecommunication", it added.

Vodafone-Essar is joint venture between Vodafone Group Plc of the UK and the Essar Group.