Telenor to shift India business into new entity

Telenor to shift India business into new entity

The Norwegian company plans to form a new entity in India and will seek to migrate its existing business, including customers and employees, into the new company, it said. Telenor also plans to bid for fresh spectrum auction through the new entity.

Norway's Telenor Group on Tuesday announced its plans to form a new entity in India for carrying out its existing Indian operations and bidding for fresh 2G licences.

The Supreme Court of India on February 2 revoked 122 licenses issued to all operators since January 2008, including Uninor's 22 licenses.

Uninor brand is owned by Unitech Wireless, which is a joint venture between the Telenor Group and real estate company Unitech Ltd. Telenor Group has 67.25 per cent ownership in Uninor.

Telenor said it expects the Uninor board to transfer Uninor's business into this new company at a fair market value, with prior consent from the Indian authorities. This will ensure a smooth transition for Uninor's employees, customers and stakeholders, it said.

Till Uninor's business is transferred to the new Indian company, Uninor operations will continue as before, Telenor said.  

The new entity will also seek requisite approvals from the Foreign Investment Promotion Board  for allowing Telenor Group to take up 74 per cent ownership, it added.

Telenor Group said it has invested Rs 6,135 crore through equity and over Rs 8,000 crore in debt through corporate guarantees in Uninor operations.

Earlier, Telenor Group had issued a notice to Unitech for indemnity, seeking compensation for all investments, guarantees and damages caused by the Supreme Court order.

Telenor Group said it has also issued to Unitech Ltd 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 added that "75 per cent shareholder votes are not needed since Uninor is a private company and in a case of fraud and misrepresentation, it [Telenor] can unilaterally declare the shareholder agreement void".

Published on: Feb 21, 2012, 8:52 PM IST
Posted by: Surajit Dasgupta, Feb 21, 2012, 8:52 PM IST