Norwegian telecommunications company Telenor has started a process for fresh valuation of its joint venture (JV) with real estate firm Unitech Group, Unitech Wireless, as it sets out to find a new partner.
It has appointed two consultants to do the valuation, according to people close to the development. The new partner will be inducted only after arriving at the fresh valuation of its telecom business in India. Telenor is operational in 13 circles and had licences to offer pan-India services. The Supreme Court earlier this month scrapped 122 telecom permits, including 22 held by Unitech Wireless under the brand name Uninor.
Earlier, BNP Paribas had valued Uninor at around Rs 800 crore, while Telenor had valued it at Rs 400 crore. Unitech, however, valued the firm at Rs 11,000-12,000 crore.
“As Telenor has started the process of looking out for a new Indian partner, the valuation at this stage, specifically after the Supreme Court cancelled the licences and subsequent auction of 2G spectrum, becomes utmost priority. Finding a new partner in the telecom business in India in the current scenario at the right price is a difficult task,” said a person in the know of developments.
| A MISSED CALL? |
| * Telenor entered India in 2009, formed JV with Unitech Ltd |
| * Holds 67.25 per cent stake in the JV |
| * Currently, it is operational in 13 circles |
| * On February 2, SC cancelled 122 licences in total |
| * 22 licences of Telenor got cancelled |
| * Last week, it sent a notice to Unitech Ltd seeking indemnity and compensation |
| * It has already invested about Rs 6,100 crore in the venture |
To an email query, Telenor stated, “We will not comment on rumours and speculations. We have very clearly declared there is no future for us with Unitech. We will start all processes we need to pursue to find a new partner to continue our participation in India.”
Telenor said Unitech guaranteed it that the licences it was invited to invest in were legal and valid. These licences had been quashed by the Supreme Court, so the company would invoke its legal rights against Unitech, it said.
Telenor last week issued a notice to Unitech seeking indemnity and compensation, following the cancellation of Uninor’s 22 licences by the Supreme Court on February 2.
The Norwegian company also expressed its willingness to participate in the 2G spectrum auction, which will take place in four months as directed by the court. It also asked the Telecom Regulatory Authority of India to restrict the auction to new players.
Unitech Group had contested Telenor’s claim, saying the SC had cancelled all unified access service licences issued on and after January 10, 2008, by questioning the government’s policy, which in no manner could be considered breach of warranties on the part of the company. “We reserve our right to take appropriate legal action against Telenor for damages caused to Unitech Group from breach of the confidentiality obligation by Telenor,” Unitech had said.
The relations between Telenor and Unitech have been soured for some time now because of differences over the mode of funding for Uninor. The issue between the two firms started with Telenor’s proposal to go for a rights issue to raise the funds. Unitech, while opposing the proposal, had gone to the courts over this. Unitech is insisting on debt funding for raising funds. It had also recently moved the Company Law Board, complaining against Telenor for mismanagement of operations. The companies are also facing arbitration in a Singapore court.
Telenor had said the Supreme Court decision referred to actions happened prior to its entry into India. Telenor entered India in 2009 and currently holds a 67.25 per cent stake in the JV, while Unitech has the rest. It has already invested Rs 6,100 crore in the venture.
