Norwegian telecom major Telenor has managed to renegotiate its deal with Unitech Wireless to acquire a higher shareholding of 67.25 per cent, against the initial agreement for 60 per cent, but at the original price of Rs 6,120 crore, effectively valuing the deal 11 per cent cheaper.
The new deal puts the enterprise value — the sum of a company’s market capitalisation plus debt minus cash — of this new-generation mobile services company floated by Delhi-headquartered real estate major Unitech at Rs 10,520 crore, against Rs 11,620 crore in the agreement signed on October 28, 2008.
At the adjusted rate, the company’s equity value stands at Rs 9,100 crore, against Rs 10,200 crore in October, a loss of Rs 1,100 crore.
Telenor had also agreed to take a loan of Rs 1,420 crore on the books of Unitech Wireless, which was given by the parent company Unitech Ltd.
Sources close to the development said cash-starved Unitech, which is in the process of restructuring its debt of Rs 8,100 crore, had little choice but to agree to the new terms. The realty major’s stake in the telecom venture, which is yet to start operations, will now be 32.75 per cent, against 40 per cent in the original agreement, which is close to the minimum requirement of 26 per cent that Indian promoters need to own in telecom ventures.
“Since the rollout was being delayed, it was difficult for Unitech to walk out of the deal and start fresh negotiations with a new partner, which would have been tough in the current environment,” sources added.
On its part, Telenor was reportedly forced to revise the price owing to stiff shareholder resistance.
The subscription of new shares in Unitech Wireless will be completed in four phases. In the first phase, which is expected to be completed shortly, Telenor will invest Rs 3,050 crore and the Norwegian company’s shareholding will rise to 33.5 per cent. Following this, Unitech Wireless will return a loan of around Rs 1,250 crore to Unitech Ltd. Since Unitech Ltd is not allowed to sell its own holding, the telecom subsidiary will issue Telenor fresh shares.
Unitech Ltd has already sold its 199-room hotel — Courtyard By Marriot in Gurgaon — for around Rs 235 crore and is in talks with some high net worth individuals to sell commercial buildings in South Delhi.
