Telenor to set up new firm, to part ways with Unitech
Date: Feb 22, 2012
NEW DELHI, February 22, 2012
Trying to save its operations post the Supreme Court order cancelling its licences issued in 2008, the Telenor Group on Tuesday said it had started the process of setting up a new Indian company to take its operations in the country forward.
“This new entity will serve as the platform to approach the upcoming auctions for fresh licenses as mandated by the Supreme Court. As part of this process, the new entity will also seek the requisite approvals from the Foreign Investment Promotion Board (FIPB) to allow the Telenor Group to take up 74 per cent ownership,” the Norwegian telecom major said in a statement. Telenor is reportedly in talks with some Indian business houses to float its new telecom joint venture.
The Telenor Group, which owns 67.25 per cent stake in Unitech Wireless and operates under the Uninor brand, has so far invested over Rs.6,135 crore through equity and over Rs.8,000 crore in corporate guarantees as a foreign investor since its entry into India. In the past two years it has secured over 4-crore subscribers and a workforce of over 17,500, besides setting up a pan-India distribution network with over 4-lakh points of sale.
“The Telenor Group has for more than a year tried to secure Uninor's long term funding needs through a rights offer. While this process has been blocked by Unitech, the Telenor Group has taken full responsibility for the financial security of Uninor by solely and fully guaranteeing for all short-term funding needs…To ensure a smooth transition for Uninor's employees, customers and stakeholders, we expect that the Uninor board would, with prior consent from the Indian authorities, transfer Uninor's business into this new company at a fair market value,” it added.
The Telenor Group has already announced that it “sees no future in a partnership with Unitech”, and that it has “a notice for indemnity, seeking compensation for all investments, guarantees and damages caused by the Supreme Court order.”
“The Telenor Group has also issued to Unitech a notice of voidance of the current shareholders' agreement with Unitech on account of fraud and misrepresentation on their part as established by the Supreme Court judgment. This voidance will take place with a prospective affect and all rights that have accrued in the past shall consequently stand preserved.
Till such time the Uninor's business is transferred to the new Indian company, Uninor operations will continue as before,” the statement added.
