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Uninor on Wednesday said that it will auction its business and assets in a bid to get maximum possible returns for its investors.
The company has invited bids till August 6. Norway’s Telenor is already in the race to buy the company. The move is being opposed by joint venture partner Unitech.
“In view of the impending Supreme Court mandated cancellation of licence on September 7, 2012, Uninor management has decided to conduct an auction of Uninor’s business, including its assets, while the company is still a going concern. This 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,’’ Uninor said in the statement.
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, 2012.
“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. As far as Uninor management is concerned, this is the only logical way to proceed as it allows the value built into the company to be preserved and not destroyed once the court ordered cancellation of licences comes into effect on September 7,’’ it said.
Uninor added that it was obliged to take this course in light of its duties towards the company’s stakeholders, including its customers, employees, shareholders and partners.
“More so when we already have an interest from Telenor Group willing to procure Uninor’s business. Telenor Asia Pte Ltd, a majority shareholder of the company, has indicated its willingness to participate through an Indian affiliate entity in the auction of the business of the company,’’ Uninor said.
But it is not clear how the company will go ahead with the plan especially since Unitech has opposed it. According to sources in Unitech, it may take legal recourse to stop the auction.
Telenor said that Unitech’s veto rights are automatically forfeited once it is established that the shareholders’ agreement and all rights enshrined in it, was based on fraud. “We are willing to establish this in court, should the need arise,’’ said a Telenor spokesperson.
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