Unitech and Telenor are at loggerheads over the latter's plans to go for a rights issue.
While the details of the proposed rights issue were not revealed, Unitech has obtained a stay order on the proposed move by Telenor. The two companies are joint venture partners in Uninor, wherein Telenor holds 67 per cent stake and the balance is with the Indian real estate major.
“Unitech has obtained a stay order on certain actions, which Telenor was proposing to take, which Unitech believes are not in the best interests of the shareholders. The court has recognised the merits in the viewpoint of Unitech,” said a spokesperson representing the real estate company.
“We will continue to engage in constructive discussions with Telenor while protecting our legal rights in the matter. We cannot comment further in this matter since it is sub-judice. However, we would like to reiterate that Unitech continues to be a long-term and committed investor in Uninor,” the spokesperson added.
This is not the first time that Telenor's rights issue has run into trouble. In January 2009, Telenor had proposed a $1.6-billion rights issue for buying Unitech Wireless' equity stake. The Norwegian company was forced to withdraw it and fund the acquisition through a combination of its own cash flow and by issuing additional debt.