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Journalism of Courage
The Essar group and Vodafone Group on Friday attempted to clear the air surrounding the formers exit from Vodafone Essar Limited (VEL). The telcos said that the contract is legally binding on both the parties and the options of the contract will be honoured.
Last week,Vodafone had said that it would exercise the option to acquire 33 per cent in VEL for $5 billion.
Commenting on media reports of a fresh round of spat brewing between both partners on Friday,Vodafone Group Plc spokesperson Simon Gordon said,We announced that the Essar Group exercised its underwritten put option and following this,we exercised a call option resulting in a total cash payment of $5 billion.
These are legally binding on both parties. However,he did not comment whether the put option exercised by Essar had an irrevocable clause. A put option is a contract between two parties where one party (the buyer of the put) has the option,but not the obligation,to sell an item at future date and at a predetermined price.
Meanwhile,the Essar Group too came out with a clarification saying that it fully intends to honor all its rights and obligations under the various agreements with Vodafone and also expects Vodafone to do the same.
