To address the concerns of its Indian partner, Norway’s Telenor on Saturday offered Unitech Group to go for arbitration over the proposed rights issue of their joint venture (JV) Uninor.
According to sources close to the development, Telenor and Uninor in a joint statement before the Gurgaon district court said there will be no dilution of stake of the share pursuant to the rights issue for a period of eight weeks. The telcos also kept the arbitration option open if Unitech felt its rights were being violated. The Unitech Group had gone to court for a stay over the proposed rights issue of Uninor.
Unitech is yet to accept the proposal of Telenor. The next hearing is on April 2.
Differences had erupted between the two partners over the funding of Uninor’s expansion plans. Telenor has 67.25 per cent in the JV. Unitech holds the rest. While Telenor wanted to go for a rights issue, Unitech was in favour of raising funds through debt.
Uninor has been unable to secure loans for its expansion since it came under the CBI scanner in the 2G spectrum probe. The Comptroller and Auditor General of India (CAG) had also said the Unitech Group suppressed information and was not eligible to get mobile licences. The case for cancellation of 85 licences, including that of Unitech, mentioned in the CAG report is under consideration of the Department of Telecommunications (DoT). DoT had issued showcause notices to all the licencees.
Telenor did not respond to an email sent to them on Saturday. There was also no official statement from Unitech.
In a statement on Friday, Telenor said the group was petitioning the court to vacate the stay order, so that the decision of the company’s board could be implemented and Uninor could get the funds.
Earlier, Unitech had said: “Unitech has obtained a stay order on certain actions, which Telenor was proposing to take, which Unitech believes are not in the best interest of the shareholders. We will continue to engage in constructive discussions with Telenor while protecting our legal rights in the matter since it is subjudice.”
In 2009, Telenor withdrew its plan to raise $1.8 billion through a rights offer and decided to fund the purchase of stake in Uninor with debt and cash reserves.
