Govt okays Vodafone buyout proposal

Govt okays Vodafone buyout proposal

Months after the government eased rules for foreign ownership in the telecom sector, the Cabinet on Thursday cleared a proposal from UK-based Vodafone to buy out minority shareholders in its Indian arm for Rs 10,141 crore. 

This will be the single largest foreign investment in the telecom sector. 

The decision, once it comes into effect, will make Vodafone India the first telecom operator to be fully owned by a foreign company. "Vodafone proposal has been approved," Information and Broadcasting Minister Manish Tewari said after a meeting of the Cabinet Committee on Economic Affairs headed by Prime Minister Manmohan Singh.

The Foreign Investment Promotion Board had cleared the proposal on December 30 last year. But it needed to be referred to the Cabinet as it was worth more than Rs 1,200 crore. 

Vodafone Group Plc, which holds a 64.38 per cent stake in the Indian unit, will buy the remaining outstanding shares from minority shareholders Ajay Piramal and Analjit Singh.

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