Telenor to float new company with 74% stake

It also severed its ties with Unitech,the real estate player.

Written by ENS Economic Bureau | New Delhi | Published:February 22, 2012 1:50 am

While some foreign telcos chose to exit India after the Supreme Court’s cancellation of 122 telecom licences,Norwegian operator Telenor on Tuesday said it would form a new company to manage its Indian operations and bid in the new auction of 2G spectrum. It also severed its ties with Unitech,the real estate player.

Telenor,which holds 67.25 per cent in Uninor,said it was declaring the companies’ shareholder agreement void after the court canceled all 22 licences. Telenor claims to have invested about Rs 15,000 crore in India and Uninor today has a 40-million strong subscriber base. Batelco and STel,two other operators whose licences were canceled,have decided to leave the Indian market.

“Telenor Group has issued to Unitech a notice of voidance of the current shareholders’ agreement with Unitech Ltd 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,” Telenor said in a statement. The Norwegian government holds a majority stake in Telenor.

Responding to the Telenor announcement,Unitech said it would contest the move in court. “We would like to clarify that the shareholders’ agreement cannot be terminated by any party unilaterally. The agreement contains non-compete provisions that Telenor’s announced move would violate,” it said in a statement.

Telenor,however,said it could unilaterally declare the agreement void in case of fraud and misrepresentation. It would not need 75 per cent of the Uninor board to approve the transfer of Uninor’s business to the new company because Telenor was a private company. The company had earlier filed a notice seeking compensation for all investments sunk after the court’s judgment.

Telenor said it will also seek approval from FIPB to take a 74 per cent stake in the new firm. Company officials would not comment if Telenor has already initiated talks with any Indian company for a joint venture. “Till such time that Uninor’s business is transferred to the new Indian company,Uninor operations will continue as before,” Telenor said.

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