The Department of Telecom has told the Foreign Investment Promotion Board (FIPB) that a decision on Uninor’s rights issue should be taken after looking into a number of pending issues.
This includes the legal notice issued by the Norwegian firm against the Indian Government under a bilateral investment treaty.
FDI norms
The Department has also told the FIPB that a decision on the rights issue should be taken only if the company meets the FDI norms and complies with security guidelines. In addition, there are pending issues related to the company’s proposed amalgamation of seven subsidiaries.
“It would be appropriate to take a final decision keeping in view and taking into consideration various development in legal cases in the Supreme Court and various ongoing issues in the DoT like their request for amalgamation of seven companies, non-fulfilment of eligibility conditions of unified access licence, arbitration etc.,” DoT said in an internal note seen by
Uninor, in which Telenor owns 67.25 per cent stake, had approached the FIPB, seeking to bring in Rs 1,200 crore as part of a rights issue. The cash-strapped company wants to use the additional funding for meeting operational expenses.
Opposed by Unitech
But the rights issue is already facing opposition from the Indian joint venture partner – Unitech, which has told the FIPB that the rights issue was already under arbitration. Unitech has already informed Telenor that it will not subscribe to a rights offer.
The DoT has told the FIPB that in case Telenor brings in a new partner then it should get security clearance for the same. The Department had raised similar concerns when the company had sought permission to raise Rs 8,200 crore through a rights issue.