According to local media citing sources close to the matter, Indian telecom joint venture Uninor has got the green light from the Foreign Investment Promotion Board (FIPB) to raise Rs82.5bn (US$1.62bn) in a rights issue.
Norwegian telco Telenor, which…
According to local media citing sources close to the matter, Indian telecom joint venture Uninor has got the green light from the Foreign Investment Promotion Board (FIPB) to raise Rs82.5bn (US$1.62bn) in a rights issue.
Norwegian telco Telenor, which owns a 67.25% stake in Uninor, confirmed that the company applied for FIPB approval of the rights issue, which is aimed at securing “Uninor’s long-term funding through equity in the absence of bank loans.
“An approval will allow us to bring in more FDI into India as operating capital to support Uninor’s continuing development.”
But a Telenor spokesman added that he could not confirm the outcome of the application, saying the company has not yet received any notification from the authority.
The rights issue has contributed to growing tensions between Telenor and its Indian partner in the JV, real estate company Unitech, over the last few months.
Earlier this year, it was suggested that Uninor was seeking to secure funding from international banks, through a rights issue and debt offering, after failing to secure loans from local lenders because of a dried-up Indian debt market.
The rights issue was, however, brought to a halt after Unitech reportedly claimed that the transaction was not in the best interests of shareholders.
But in September, the Punjab and Haryana High Court ruled that Uninor could go ahead with its proposed rights issue.
In October, Unitech reportedly accused Telenor of mismanaging Uninor. In a statement, Telenor replied, saying it would “present the facts in this new legal initiative taken by Unitech.”
