Mumbai, July 21, 2005: Essar today announced that it has entered into a binding agreement with Mr. Rajeev Chandrasekhar to acquire a controlling interest in BPL Communications. The deal is valued at over 1.2 Billion Dollars (over Rs. 4400 Crores)

It is the stated intention of Essar to have BPL Mobile merge with Hutchison Essar's cellular services after the necessary approvals. Once merged, Hutchison Essar will become a second largest player in telephony in the country with a combined subscriber base of over 11 million across 21 circles.

BPL Communications owns a 74 per cent stake in BPL Mobile Communications (operations in Mumbai) and 100 per cent ownership of BPL Mobile Cellular (operations in Maharashtra & Goa, Tamil Nadu & Pondicherry and Kerala).

Announcing the agreement, Mr. Ravi Ruia, Vice Chairman, Essar Group, said, "This agreement gives us the ability to increase our presence in the country and add muscle to a already strong presence through Hutchison Essar's.. Our aim is to become the leading telephony services provider in the region. This and the Essar Group's other plans in the telecom sector will give us a PAN India footprint and make us a significant player in this business. BPL Mobile is a franchise that we admire immensely and Rajeev has built a tremendously exciting company over the last 10 years. We have always admired Rajeev for his commitment and tenacity and building a Billion Dollar telecom franchise at his young age, despite all the odds is a very impressive achievement for a first time entrepreneur."

Mr. Rajeev Chandrasekhar, Chairman and CEO, BPL Mobile, said, "The BPL Mobile franchise has been built over the last 10 years with a lot of passion, commitment and effort and enjoys the unstinting and unparalleled trust of millions of subscribers. The strength of our franchise along with the strong financial performance post in recent months and last one year made us a highly valuable investment proposition for Essar"

"I am proud and privileged to have worked with hundreds of members of the team that built BPL Mobile and further privileged to have earned the trust of millions of customers over the last 10 years. To them all I say that leaving BPL Mobile was and is not an easy decision. However keeping the emotional tugs aside it was important I take the best decision for the franchise along with our customers and employees. I strongly believe that the decision to be acquired by Essar and eventually Hutch Essar is the best for our customers and team members of BPL Mobile and that this more than anything else was what helped me decide in favour of Essar."

"Over the last decade BPL Mobile has remained the one constant in the ever changing and evolving Indian Telecom sector. Many companies came and went overwhelmed by the 'challenges' that have characterized this sector. But we persevered, prevailed and succeeded. We remain today an unquestioned no 1 or no 2 in all our markets, despite the intense competition and disadvantageous hand that was dealt to the pioneering companies and investors by regulation and policy. Of this we are very proud of"

"On a personal note, the monetization of my investment in BPL Mobile creates a strong capital base for my new ventures and investments in the present and in the future"

Mr Nimesh Kampani, Chairman JM Morgan Stanley said "This agreement marks a landmark transaction in the Indian M&A space and this transaction is one of the largest Acquisitions in India. Rajeev and BPL Mobile has built a leading business in all its markets and Rajeev has built this business from grass root and has created significant value for all stakeholders of the company. The proposed combine of Hutch Essar and BPL Mobile will create a national footprint and will emerge as a strong force alongside Airtel and Reliance. I have known Rajeev for a long time and am very sure that he will continue to be one of our Key Business Leaders taking India into the next phase of Global Glory"

JM Morgan Stanley acted as sole Financial advisor to Company and Rajeev Chandrasekhar.

About the Essar Group
The Essar Group is one of India's largest corporate houses with interests spanning the manufacturing and service sectors like Steel, Shipping, Power, Oil & Gas, Telecom & BPO and Constructions. The Group has an asset base of over Rs.20, 000 crores. For more details, log on to www.essar.com. It is the largest Indian shareholder of Hutchison Essar, India's leading pure-play cellular company serving over almost 9 Million subscribers under the Orange and Hutch brands.

About Hutchison Essar
Hutchison Essar is one of India's leading cellular service companies. A joint venture between Hutchison Telecom and the Essar Group, Hutchison Essar and affiliates now have pan-India operations in 13 circles including four metro cities. The current subscriber bas is over 8.5 million. It can leverage strengths from Hutchison Telecom's international cellular operations across five continents.

About BPL Mobile
BPL mobile is one of India's premier cellular mobile service providers with over 2.8 million subscribers across 209 cities in the markets of Mumbai, Maharashtra, Kerala, Tamil Nadu, Pondicherry and Goa. BPL Mobile subscribers enjoy India's best service through world-class technology and services and a network that gives superior coverage and amazing clarity. It has revolutionized mobile communications industry in India with its state of the art technology, which includes the unique network design, the Qualnet, Camel Phase 2 Intelligent Network (IN) platform and GPRS providing cutting edge services like Multimedia Messaging (MMS), mobile browsing, Java based mobile games amongst others.