The Hindu Business Line : Vodafone deal has non-compete clause

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Mumbai Feb. 21 Hutchison Telecom has given an undertaking to Vodafone that it will not invest in telecom and related activities in India that are the domain of Hutchison Essar Ltd. This non-compete agreement is for a period of three years from completion of the Hutch-Vodafone deal, according to a statement from Hutchison Telecom International (HTIL).

HTIL on Wednesday said that it would hold an extraordinary general meeting on March 9 for shareholder approval for the Hutch-Vodafone deal. Hong-Kong based HTIL agreed to sell its 66.98 per cent stake in Hutchison-Essar Ltd (HEL) to UK-based Vodafone for $11.08 billion (after reduction of net debt).

Irrevocable Undertakings

HTIL will also not employ any key employee of the HEL group, not induce or entice any such employee to terminate his employment with HEL for a period of six months from the date of completion of the deal.

Certain wholly owned subsidiaries of Hutchison Whampoa Ltd, which were the registered holders of an aggregate of 49.66 per cent of the issued share capital of HTIL at the `latest practicable date', have given irrevocable undertakings to Vodafone to vote in favour of the resolution to be proposed at the EGM to approve the transaction, said the statement.

The completion of the transaction will take place on April 2, or on the sixth business day after the day on which the last of the conditions (for completion of the transaction) has been satisfied or waived, whichever is later, said HTIL.

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