Telenor to form new company for India operations

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SME Times News Bureau | 22 Feb, 2012
Norway-based Telenor Group Tuesday said it intends to form a new company through which it would carry on its mobile business in India and participate in the upcoming 2G spectrum auction.

"This new entity will serve as the platform to approach the upcoming auctions for fresh licenses as mandated by the Supreme Court," Telenor said in a statement.

Telenor and its Indian partner Unitech had been at loggerheads even before Supreme Court cancelled 122 spectrum licences issued in 2008, including 22 licences of Uninor.

The group also issued Unitech a notice of voiding the current shareholders' agreement with Unitech Ltd on "account of fraud and misrepresentation".

Addressing Unitech, Telenor said: "In order to ensure a smooth transition for Uninor's employees, customers and stakeholders, we expect that the Uninor Board would, with prior consent from the Indian authorities, transfer Uninor's business into this new company at a fair market value."

However the firm confirmed that till the time Uninor's business is transferred to the new Indian company, Uninor operations will continue as before.

About the new entity, Telenor said it would also seek Foreign Investment Promotion Board (FIPB's) approval for 74 percent ownership in the joint venture.

Telenor said for more than a year it tried to secure Uninor's long-term funding needs though a rights offer.

"While this process has been blocked by Unitech, Telenor Group has taken full responsibility for the financial security of Uninor by solely and fully guaranteeing for all short term funding needs."

The telecom player said it has invested Rs.6,135 crore through equity and over Rs.8,000 crore in debt through corporate guarantees to build Uninor.

It also claimed of a workforce of over 17,500, a distribution network with more than 400,000 points of sale and 40 million customers across the country.

Telenor had earlier announced that it sees no future in a partnership with Unitech, and that it has issued a notice for indemnity, seeking compensation for all investments, guarantees and damages caused by the Supreme Court order.