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Company Law Board stays Uninor auction move

Thomas K. Thomas
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Uninor had set a minimum price of Rs 4,000 crore for the India telecom business and said Telenor would pay Rs 4,190 crore in case no other bidder evinces interest by August 6.
Uninor had set a minimum price of Rs 4,000 crore for the India telecom business and said Telenor would pay Rs 4,190 crore in case no other bidder evinces interest by August 6.

Uninor says Unitech is spoiling employees’ chances of sustainable employment

In a blow to Telenor’s plans in India, the Company Law Board has stayed Uninor’s move to auction its business and assets. The stay order could dampen Telenor’s efforts to transfer Uninor’s business into a new entity and bring in another Indian partner before the upcoming auction.

Reacting to the CLB order Uninor said that it faces a certain destruction of value when the licences will be cancelled, and the minority shareholder was blocking the only chance its employees have for sustained employment and for the customers to continue. “It is unfortunate that the stay has been granted. Uninor will pursue every legal measure available to it in the Indian courts to secure the interest of the company’s creditors, customers and employees,” Uninor said in a statement

On Thursday, Unitech had approached the CLB against Uninor’s decision to auction its assets. Unitech, which owns about 33 per cent stake in Uninor, wants to be paid off at a higher valuation than what Telenor is willing to pay.

Uninor had set a minimum price of Rs 4,000 crore for the India telecom business and said Telenor would pay Rs 4,190 crore in case no other bidder evinces interest by August 6. Unitech wanted the valuation to be pegged at Rs 12,000 crore for its share in the company.

Uninor on Wednesday had said that it will auction its business and assets in a bid to get maximum possible returns for its investors. The company had invited bids till August 6. The company said this process will ensure that the value of 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.

Unitech, however, 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.

thomas.thomas@thehindu.co.in

(This article was published on August 3, 2012)
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