Unitech protests; Telenor ready to buy back via another entity
Uninor will auction its business and assets in a bid to realise optimum value while it is still operational.
The company has invited expression of interest by August 6 from prospective bidders. Norway’s Telenor, which currently owns about 67 per cent stake in the company, has said it was interested in buying back the assets through a different Indian entity.
Legal action planned
The move drew protest from the existing Indian partner, Unitech, which has threatened to take legal action to stop the auction.
Unitech said this was an indirect attempt by the Nordic company to indirectly bring a new Indian partner.
Telenor responded by saying that Unitech has forfeited its veto right once it is established that the shareholders agreement and all rights enshrined in it was based on fraud.
Uninor’s licences are set to get cancelled on September 7 along with those of other new operators after the Supreme Court found that the permits were issued illegally in 2010.
Uninor said that an auction before the licences are scrapped will allow the company to generate the maximum possible returns for its creditors and also secure the future of Uninor’s customers, employees and business partners in the hands of new ownership.
“This process will ensure that the value of the Uninor business is secured beyond September 7 as the winning bidder would have the ability to continue Uninor’s business as a going concern beyond September 7. On the contrary, if the auction process is not followed, the company would have no option but to be liquidated post September 7, when the company loses its licences,” Uninor said in a statement. Telenor said an open auction will remove any dispute around the real valuation of the Uninor business.
The Norwegian firm has been at loggerheads with Unitech over Uninor’s valuation with the Indian real estate major claiming it to be worth Rs 12,000 crore.
Telenor said that if it was successful in the auction of Uninor’s business, it will be transferred to a new company with which Telenor may approach the upcoming spectrum auctions.
Unitech said the fact that Uninor, the auctioneer and the only party to have expressed interest already are all under the direct control of the same management of Telenor, only shows that this is not a free and fair process.
“Uninor’s continuing with the process is in sheer disregard to the rights of minority shareholders. Further, not only will all equipment get transferred to another entity, even sensitive items such as all customer data will get transferred. Uninor’s vendors that aid in this transfer are equally at risk for this illegal transfer,” Unitech said.