Real estate major Unitech has said there were no breach of warranties on its part and that it will contest any demand for compensation from its Norwegian partner in the telecom business, Telenor.
Telenor had on Wednesday said it will be seeking indemnities from Unitech for cancellation of telecom licences, blaming Unitech for the cancellation of 22 licences held by their telecom joint venture Uninor.
The Telenor Group had invested Rs 6,100 crore for 67.25 per cent ownership in Uninor and additionally is also fully guaranteeing Rs 8,000 crore of short-term debt.
“At the outset, we would like to clarify that the Supreme Court has cancelled all the UAS licences and spectrum granted on and after January 10, 2008, and has raised multiple questions on the Government policy which in no manner can be considered as breach of warranties on the part of Unitech Ltd,” Unitech said in a statement.
Claiming that, “It is incorrect to claim or even suggest that the cancellation of the UAS licences by the Supreme Court demonstrates a breach of any warranties on the part of Unitech,” the company said “at best, Telenor group can invoke the provisions between the governments for protection of their investment in India,” adding, “any demand from Unitech shall be contested”.
Net profit halves
Meanwhile, Unitech Ltd, India's third-biggest realty developer by market value, reported a halving of its quarterly net profit, as the company was hit by slowing demand and rising interest rates.
Unitech recorded a 50 per cent decline in net profit, at Rs 55.2 crore for the three-month period ended December 31 as against Rs 110 crore a year earlier.
The company's net sales were down 22 per cent at Rs 514 crore.
“Business environment remained challenging during the quarter affecting the company's ability to scale up construction activity,” said Mr Ajay Chandra, Managing Director, Unitech.