Norway’s Telenor and Indian real estate firm Unitech take opposing views on the decision of the board of directors of their Indian joint venture, Uninor, to sell the business, including all assets, via auction ahead of 7 September, when its 2G licences…
Norway’s Telenor and Indian real estate firm Unitech take opposing views on the decision of the board of directors of their Indian joint venture, Uninor, to sell the business, including all assets, via auction ahead of 7 September, when its 2G licences are set to be cancelled.
Announcing the planned auction, Uninor said it “will allow the company to generate the maximum possible returns for creditors and also secure the future of Uninor’s customers, employees and businesses in the hands of new ownership”.
India’s Supreme Court decided in February to revoke a total 122 licences from numerous operators as a result of the so-called 2G scam saga.
Uninor said the winning bidder will be able to continue the business’ operations if the government’s planned 2G auction, scheduled to take place on 31 August, does indeed go ahead.
“On the contrary, if the auction process is not followed, the company would have no option but to be liquidated post 7 September when [it] loses its licences”.
Uninor management believe the auction is “the only logical way to proceed” as it will enable the company’s inherent value to be realised before the licence suspensions, the statement read.
Telenor, which controls 67.25% of the JV, lent its support to the auction in a separate statement, saying the court-mandated licence suspensions will destroy any value of the Uninor business.
“We do not see why any shareholder should want this value destruction to happen when it is possible to conduct an open and transparent auction of Uninor’s business while Uninor is still a going concern,” the company said. “An open auction will also remove any dispute around the real valuation of the Uninor business.”
Telenor said it is willing to participate in the auction and procure all of Uninor’s business in order to preserve it.
“If Telenor is successful in the auction of Uninor’s business, it will also gives us the ability to secure a future for Uninor’s customers, employees and partners as Uninor’s business will be transferred to a new company with which Telenor may approach the upcoming spectrum auctions.”
Unitech is believed to strongly oppose the planned auction and, according to Indian media reports, may take legal action against it.
However, Telenor said it believes Unitech’s veto rights will be forfeited as a result of what it contends is a shareholders’ agreement based on fraud.
“We are willing to establish this in court, should the need arise,” the company said.
Unitech was not available for comment before press deadline.
