Hutch sale draws phisaddi

Phisaddi eying Hutch

Out to teach the big players, 'a lesson'

New Delhi: In a move that could add a new dimension to the ongoing tussle for controlling Hutchison-Essar, local pan tycoon Phisaddi Lal has submitted a non-binding bid for gaining a controlling stake in the venture. This was communicated to the Bhootnath Stock Exchange, in a company announcement released by Phisaddi and sons early morning today.

The Phisaddi group, which has interests in Banarasi pan, roadside langot and juice joint business around the national capital, is the latest entrant in the ongoing war to gain control over what has been rated as the third biggest player in the Indian cellular market. Sodafone, Reliance, Hindujas and the Chuiyas, are currently the key contenders for Hutchison's stake in Hutchison-Essar.

The company has already begun due diligence on the venture. A team of 7 executives from the firm has flown in to Mumbai for carrying the negotiations forward. Jhumrithalaiya-based legal firm Chadillal Associates have been roped in for assistance in the diligence process. When contacted, a top Phisaddi Group spokesman declined to comment on the move. Chadilal has been specifically asked to look into issues relating to the 'Right of First Refusal' (RoFR), which has been a cause for concern for many players.

Inspite of the tough competition, CMD Phisaddi is confident of pulling off the deal. "We have not overvalued the deal like our competitors and besides, we do not face any restrictions like our image conscious rivals," he said. He also claimed that he was tired of the shindig raised by many 'non-serious' parties to raise the valuation of Hutchison-Essar. "These people are jumping in like there is some free sale of unused discount langots and we will put an end to this," he said. For his rivals he just had this to say, "keep it low boys and don't buy pyjama for the price of trousers. The CMD told us that he was completely upset with the existing service providers, who, according to him, were cheating the public by charging hidden fees and providing substandard service. "These fellows are bidding for Hutch-Essar like they have some ancestral property which they could sell and get the funds. Ultimately, they will be overcharging us to fund this deal," he said.

On the lines of Arun Sarin and A-nil Ambani, Phisadi will meet the Union Commerce Minister and others including lallo, telecom secretary etc. This move is designed to ease some pressure build on these guys by Sodaphone and Reliance.

Motilal Pungeewala, finance & group chief financial officer said the group would not face any problem in financing the deal. He said that the company is looking at a combination of both internal accruals and debt. According to Motilal, most of the money would be raised from the sale of old mixer grinders, newspapers, used tyres and juice vending machines lying with the company since last two decades. The company has already entered into an agreement with the Radiwala group for this. Phisaddi Group plans to create a Special Purpose Vehicle for this venture and would be open to non competing partners for funding the deal.

Mickey Menon-