Real-estate major Unitech has offered to buy Telenor's stake in Uninor if the valuation of the company is fixed at Rs 600 crore. This comes after the valuators appointed by the Norwegian company fixed Rs 600 crore as the value of Uninor. While Unitech has disagreed with this valuation it has offered to buy out Telenor's 67.25 per cent stake if the latter insists on this pricing.

Speaking to Business Line, Mr Nirjhar Goel, Unitech Ltd's nominee on Uninor Board said: “We feel that company's value is in excess of Rs 12,000 crore but, according to Telenor, the valuation is only Rs 600 crore. If that's the case, we have offered to buy their shares.”

Rights or debt?

The two partners in Uninor have been fighting over a proposed rights issue. While Telenor wants to raise money through a rights issue, Unitech is in favour of taking the debt route. “Telenor may be cash-rich and wants to run the businesses only on equity. But we feel that this business cannot be all equity. Unitech is in favour of raising debt,” he said.

Mr Goel said that the proposed rights issue was being forced by Telenor on Uninor, wrongly and illegally, at a time when the company does not require it. “As per the shareholding agreement signed between the two partners, a rights issue is the last option to be explored in absence of any other mode of funding. Uninor had Rs 9,500 crore funding available from SBI, which, after initial interest, Telenor arbitrarily declined,” he said.

Fund availability

The Unitech nominee said that Telenor is forcing the rights issue on ground that debt funding is not available to telecom companies in India. “Recently, in November 2011, Uninor got a loan of Rs1,000 crore for three years, which clearly contradicts the Telenor position,” Mr Goel said.

He added that Uninor cannot go ahead with the rights issue as the matter is still being heard by an arbitration panel. Unitech has also challenged the unilateral appointment of BNP Paribas as the independent valuer by Telenor.

“The Punjab and Haryana High Court's decision to allow the rights issue is also conditional on the outcome of this arbitration. Any attempt by Telenor to emphasise ‘going ahead with the rights issue' is misleading and illegitimate, and will result in oppression to the minority shareholder,” Mr Goel said.

tkt@thehindu.co.in

(This article was published on January 18, 2012)
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