Hutchison Essar receives DoT approval (India)
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The negotiated settlement between Hutchison Telecommunications International Limited (HTIL) and Essar depends mainly on Hutchison Essar Limited's (HEL) willingness to pay a higher price for BPL Mobile. According to sources, as the valuation of telecom companies has gone up by over 30 per cent since December 2005, a commensurate increase in the valuation of the company is the key to the settlement. Meanwhile, the Department of Telecommunications (DoT) has given HEL approval to merge with BPL Mobile Communications Limited (BMCL). This could bolster the Hong Kong-based Hutchison's legal case against the Essar Group as Essar had cited the nonreceipt of DoT approval by the July 31 deadline as the main reason for terminating the agreement. However, in order to keep the DoT application for merger valid, Essar will not act on BMCL's sale termination notice to HEL. At the same time, it is maintaining that permission granted by DoT was for merger and not for acquisition of BMCL shares.
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