BPL Mobile Cellular Limited, a subsidiary of Hutchison Essar Ltd., has mopped up US$ 80 million by sale of 17% equity shares to a Mauritius-based company, owned by an international institutional fund investing in emerging markets.

The company intends to use the fund for expanding BPL Mobile`s services in Mumbai and financing its subsidiary Loop Telecom, which has recently acquired all-India mobile licenses and paid Rs 1400 crore as license fee.

BPL Mobile is presently under arbitration over a dispute for ownership of BPL Mobile Communications between Hutchison and Essar group.

Last year, Vodafone bought a controlling stake of 67% in Huchison Essar from Hong Kong’s Hutchison for $11 billion. However, the Ruia family, owners of the Essar group retained a 33% stake in the JV, which was later renamed it as Vodafone Essar.

Following the deal, Vodafone got caught up in a dispute between Hutchison and Essar over the ownership of BPL Mobile Communications.

Essar group had blamed Hutchison for missing a deadline for receiving regulatory approval for taking over BPL Mobile as part of an earlier agreement.

The matter was later on taken up by the arbitration panel. Last week, arbitration panel ordered Essar group to freeze the sale of any shares of BPL Mobile Communications, and its subsidiary Loop Telecom.

However BPL said in a statement that this capital issuance was not in violation of the operative interim order of arbitrators.

According to sources, with the disclosure of latest events, the cracks in the partnership between Vodafone Group Plc. and the Ruias of the Essar Group, its JV partner in India are likely to widen. The next hearing by arbitration panel will take place on November 15.