Vodafone,Essar to honour options of contract

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.