Real estate major Unitech on Thursday said that it will exit its telecom venture with Telenor after the two partners reached an agreement to amicably settle all disputes. The terms of the agreement were not disclosed. This paves the way for Telenor to transfer Uninor’s assets into a new company for which the Norwegian firm is in talks with possible Indian partners.
“Telenor is preparing to participate in the upcoming 2G spectrum auction through this new entity, but will take a final decision on whether to participate at a later date.,” said a Telenor spokesperson.
Unitech said that it has agreed to dispose of its shareholding in Uninor for a nominal amount and Unitech shall continue to retain its economic rights associated with its current shareholding in Uninor. Under the agreement Unitech could get a share of the money left in Uninor’s books after settling all debts and paying off vendors.
Unitech shares rose 17 per cent to Rs 27.20 at close on the BSE.
Unitech Ltd nominees will withdraw from the Uninor board and all special shareholder rights shall stand suspended. Subsequent to a successful business transfer and spectrum auction, all disputes and claims between the parties shall stand withdrawn. “With the settlement of disputes with Telenor, Unitech Group will be able to have more focus and management bandwidth to further its core business of real estate and monetisation of its land parcels across the country so as to enhance the stakeholder’s value,’’ Unitech said.
The two companies have been at loggerheads over the past two years over a number of issues prompting the foreign partner to float another venture.
In February, Telenor had served a divorce notice to Unitech and sought compensation from the real estate company after the Supreme Court cancelled 122 mobile permits. Telenor holds a little over 67 per cent in the JV and Unitech the rest.
The two partners had also disagreed on raising money through a rights issue. While Telenor wanted to go for a rights issue, the Indian company was in favour of bank loans. The issue was taken to the Company Law Board and the High Court.
The two partners could not agree on the valuation of the telecom venture. Telenor had invited bids for buying Uninor for a minimum of Rs 4,000 crore. Unitech had pegged the valuation at Rs 12,000 crore. It is not clear how much Telenor has agreed to finally pay Unitech.