Jurisdiction - India
India – Government Panel Approves Buy-Out Of Vodafone Indian Wireless Venture.

6 January, 2014


Legal News & Analysis – Asia Pacific – India – TMT 


On Monday, members of India’s Foreign Investment Promotion Board (FIPB) approved Vodafone’s US$1.6 billion plan to  acquire remaining shares it does not already own in Vodafone India (VI), the nation’s second-largest wireless carrier. 


The  move, announced by Vodafone in October, would give the British wireless giant full control of VI in accordance with market liberalization measures adopted by India’s government last July. Those measures which allow foreign entities to acquire 100% ownership of domestic telecommunications carriers. (Prior to that directive, foreign ownership of domestic telecom operators had been capped at 74%.) At the present time, Vodafone owns a direct stake of 64.4% in VI and an additional stake of 20.1% through various subsidiaries.


The buy-out plan targets various local investors that, collectively, hold 15.5% of VI’s shares, and Vodafone has notified the FIPB that it would consider investing additional cash in VI through share subscriptions once the buy-out plan is approved. In compliance with government rules that pertain to direct foreign investments of 12 billion rupees or more, Vodafone still must obtain the consent of India’s federal cabinet to proceed with the transaction. Observers believe that cabinet approval will be forthcoming in a matter of weeks.


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