New Delhi: Vodafone on Wednesday paid USD 1.9 billion to Essar as first tranche for buying 22 percent stake,held by offshore entities belonging to Ruias in their telecom joint venture Vodafone-Essar.

The 22.03 percent stake, held in the JV by offshore entities of the Ruias-led Essar, is valued at USD 3.8 billion.

"We have made the first tranche of payment to Essar," a Vodafone spokesperson said.

Of Essar's 33 percent stake in the JV, 22.03 percent is owned by the company's overseas entities, while the rest 10.97 percent is held by the group's Indian firms and is valued at USD 1.2 billion.

According to sources, Vodafone has now paid USD 1.9 billion to Essar and the balance which is USD 1.9 billion would be paid in November.

To sell the remaining 10.97 percent in the telecom joint venture, Essar has approached the Reserve Bank of India (RBI) for approval.

When contacted, Essar spokesperson declined to comment.

In March, Vodafone had said it would opt to purchase Essar's entire 33 percent stake, valued at USD 5 billion.

Once the deal is complete, Essar would completely exit from the joint venture, which is offering nationwide mobile services in India.

Vodafone had entered Indian market in 2007 when it bought Hutchison's stake in the joint venture for over USD 11 billion and after that it had entered into an agreement with Essar for a call and put option for its stake.

(Agencies)