Vodafone Essar IPO plans shelved until next year: source

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India's mobile phone firm Vodafone Essar has shelved plans for a multi-billion-dollar initial public offering until next year, a source familiar with the matter said Thursday.

The multinational Essar Group had in July invited investment banks to advise it on an IPO of the joint venture mobile phone company, which could have raised up to 1.5 billion dollars.

"Essar was exploring the market," the source told AFP, on condition of anonymity. But he added that the IPO plans were postponed before bankers were appointed.

"Plans for an IPO are unlikely until the first quarter of 2011," he said.

Vodafone declined to comment, while an Essar group spokesman said they do not comment on market speculation.

Essar, which owns 33 percent of the mobile phone venture, is looking to sell part of its stake, bankers familiar with the deal said earlier.

"They (Essar) were not getting the valuation they were looking for," said a banker who was involved in pitching for the IPO mandate.

The Vodafone Group owns the remaining 67 percent of Vodafone Essar, which had more than 111.4 million customers across India at the end of July.

The source said Essar may consider a put option -- to sell part or all of its stake to Vodafone for a fixed five billion dollars -- which is set out in an agreement signed after Vodafone and Essar became partners in 2007.

© 2010 AFP

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