Uninor, the Indian venture of Norway-based Telenor, put its entire telecom business on auction for a minimum of Rs 4,000 crore on Wednesday, a move opposed by its minority stakeholder Unitech.
The move is going to intensify the row between the two stakeholders.
Telenor wants to scrap the joint venture (JV) with Unitech and shift its business to a new company to seek fresh operating licences as the JV's 22 telecom licences were among the 122 cancelled by the Supreme Court on February 2.
Telenor, which holds 67.25-per cent stake in Uninor, is keen to acquire the business to protect its Rs 14,000-crore investment and retain 45 million customers.
It will pay Rs 4,190 crore, in case, no one else turns up in the auction, Unitech Wireless Pvt Ltd, which operates under the Uninor brand, said in the auction notice.
Unitech holds 32.75-per cent stake in Uninor.
"The proposed auction of Uninor assets is nothing but a circuitous way for Telenor to transfer these assets to another of its own entities," Unitech said in a statement.
"Instead of a direct transfer, an auction is being proposed to provide it a garb of legitimacy knowing that no new telecom company will value the assets before acquiring spectrum."
Uninor said it wants to auction the company's business, including its assets, before the September 7 deadline, set by the Supreme Court for winding up of operations of all firms whose licenses were cancelled.
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Unitech nominees had vetoed the move to auction the assets in the board meeting of Uninor.
"Courts in India have already held that the Articles of Uninor cannot be disregarded," Unitech further said indicating that the company may initiate legal action if Uninor was to go ahead with the sale.
"Whether the shareholder's agreement can be unilaterally rescinded by Telenor is also a subject matter of arbitration between the shareholders and any decision by Telenor otherwise is prejudicing and circumventing this entire process," Unitech added.
Auction will allow the company to generate the maximum possible returns for its creditors and secure the future of Uninor's customers, employees and business partners in the hands of new ownership, Unitech added.
With inputs from Mail Today