Norwegian telecom major Telenor has rejected Unitech’s offer to buy out its stake in Uninor. The foreign player also said that Unitech’s proposal to buy out Telenor proved that it wasn’t’ the real estate major’s ability but their unwillingness to invest in Uninor.
“It is truly astonishing that Unitech would make this offer (to buy) in the press but not in the board room. Nonetheless, this now clearly proves that it isn’t their inability but rather their unwillingness to invest in Uninor – as we have always known it to be,” said Mr Glenn Mandelid, Director of Communications, for Telenor’s Asian operations.
“We would like to categorically state that Telenor Group isn’t interested in Unitech’s funds, but Uninor is. We expect that Unitech will use these funds to discharge their responsibilities towards Uninor,” he added.
Valuation game
On Wednesday, Unitech’s nominee on Uninor board had told Business Line that the real estate firm had offered to buy out Telenor’s 67.2 per cent stake in the company if the Norwegian major insisted on fixing the valuation at Rs 600 crore. Unitech also said that it did not agree with this valuation as Uninor was worth more than Rs 12,000 crore.
But Mr Mandelid said that the valuation process has been minutely detailed in the shareholders’ agreement – including how the independent valuator is to be appointed. “As long as this process has been followed, why should anyone protest at the numbers that come out just because they aren’t to one’s liking,” he said.
Rights Issue
On the allegations that Telenor was forcing the rights issue Mr Mandelid said that though the shareholders agreement prescribed a hierarchy of funding wherein taking debt was the first option, the company was going through with the rights issue because banks declined giving loans. “Due to the 2G spectrum investigations in which certain parties got charged, banks pulled out anyway. The entire hierarchy of funding has been followed before we came to the equity option,” he said.
The Unitech representative had said that Telenor was forcing the rights issue on Uninor illegally and the best route was to take debt. But Mr Mandelid said that Unitech had tried to block the rights issue in courts but the the High Court overturned the stay order and allowed Telenor to proceed. “By terming the rights process illegal, is Unitech casting aspersions on the legality of the High Court order?,” Mr Mandelid said.
Telenor and Unitech have been at loggerheads over the rights issue. While the Norwegian major is in favour of raising Rs 8,200 crore to fund Uninor’s expansion plans, Unitech does not want to subscribe to this issue. Earlier Telenor had said that it may even look for another Indian partner if Unitech did not subscribe to the issue.