Citigroup will pocket a whopping commitment fee of $40 million (about Rs 1.8 billion) from Ruias-promoted Essar Group as part of a deal struck between the two for funding a deal to acquire Hutch-Essar, a media report said in London on Tuesday.

Citigroup, which had agreed to lend $14 billion to fund Essar's bid to buy out its Hong Kong based partner Hutchison Telecom in Hutch-Essar, would get this commitment fee in spite of the Indian conglomerate failing to take full control of its mobile phone joint venture, British daily Financial Times quoted unnamed people familiar with the situation as saying.

The fee, which is regarded as unusually large, was the talk of Hong Kongs tight-knit banking community on Monday, the report added.

The race for Hutch-Essar

According to the paper, Citigroup was among a number of banks advising Essar and last week it alone agreed to commit to lend $14 billion to the company to help bankroll a bid for a 67 per cent stake in Hutchison Essar.

Until last month, Citigroup had expected to shoulder a commitment of about $7 billion, but the bank ended up doubling its commitment following late withdrawals by Merrill Lynch, Morgan Stanley and Lehman Brothers, it added.

Essar Group, as well as two other suitors -- Reliance Communications and a Hindujas-led consortium -- were outbid by UK's Vodafone Group this weekend with a $11.08 billion cash offer to acquire HTIL's 67 per cent stake in a deal that valued the entire venture at an enterprise value of $18.8 billion. Spokespersons for Essar Group and Citigroup were not available for comments.