- Joined
- 3 Nov 2010
- Messages
- 27,848
- Solutions
- 8
- Reaction score
- 38,397
NEW DELHI: Nearly five years after venturing into telecom and investing over Rs 600 crore, real estate major Unitech decided to part ways with Telenor, its Norwegian partner in the mobile venture, paying a nominal Rs 25 crore to settle its messy dispute.
Sources said Unitech decided to settle the dispute after Telenor slapped a Rs 6,500 crore indemnity claim. Both companies wanted to settle the issue as a protracted legal battle was not helping either's cause. "This was a big overhang for Unitech and would have stretched its financial capacity," said a source familiar with the developments. Both companies, however, declined to comment on the settlement amount, citing a confidentiality clause but sources confirmed the deal to TOI.
The move will benefit both players as Telenor, which is in talks with three-four potential partners, can go ahead with bidding for 2G spectrum next month, leaving behind the controversy. Similarly, Unitech will now focus on real estate, its main business, after exiting several peripheral areas as part of its strategy to consolidate its operations after the 2008 financial crisis.
Telenor's acquisition of stake in Unitech Wireless, which controversially won telecom licences during former telecom minister A Raja's term in 2008, has attracted severe scrutiny with investigators alleging that the Norwegian company paid a hefty premium for buying into a company that had nothing but spectrum as its asset. Telenor had paid over Rs 6,000 crore to get a controlling 67% stake in the joint venture which operates under the Uninor brand. "Unitech has agreed to dispose of its shareholding in Uninor for a nominal amount and Unitech shall continue to retain its economic rights associated with its current shareholding in Unitech Wireless. With immediate effect, Unitech nominees will withdraw from the Uninor board and all special shareholder rights shall stand suspended. Subsequent to a successful business transfer and spectrum auction, all disputes and claims between the parties shall stand withdrawn/concluded," the real estate player said in a statement. Its shares jumped 17.5% to close at Rs 27.20 on the Bombay Stock Exchange.
Uninor currently has 45 million customers and Telenor, if successful in the spectrum bid, will benefit from a ready customer base. Although the Norwegian telco is hunting for a partner, companies have been allowed to bid even without a local ally. They will, however, have to rope in a partner if they manage to get spectrum during the auctions that begin next month.
Unitech settles with Telenor for Rs 25 crore - The Times of India
Sources said Unitech decided to settle the dispute after Telenor slapped a Rs 6,500 crore indemnity claim. Both companies wanted to settle the issue as a protracted legal battle was not helping either's cause. "This was a big overhang for Unitech and would have stretched its financial capacity," said a source familiar with the developments. Both companies, however, declined to comment on the settlement amount, citing a confidentiality clause but sources confirmed the deal to TOI.
The move will benefit both players as Telenor, which is in talks with three-four potential partners, can go ahead with bidding for 2G spectrum next month, leaving behind the controversy. Similarly, Unitech will now focus on real estate, its main business, after exiting several peripheral areas as part of its strategy to consolidate its operations after the 2008 financial crisis.
Telenor's acquisition of stake in Unitech Wireless, which controversially won telecom licences during former telecom minister A Raja's term in 2008, has attracted severe scrutiny with investigators alleging that the Norwegian company paid a hefty premium for buying into a company that had nothing but spectrum as its asset. Telenor had paid over Rs 6,000 crore to get a controlling 67% stake in the joint venture which operates under the Uninor brand. "Unitech has agreed to dispose of its shareholding in Uninor for a nominal amount and Unitech shall continue to retain its economic rights associated with its current shareholding in Unitech Wireless. With immediate effect, Unitech nominees will withdraw from the Uninor board and all special shareholder rights shall stand suspended. Subsequent to a successful business transfer and spectrum auction, all disputes and claims between the parties shall stand withdrawn/concluded," the real estate player said in a statement. Its shares jumped 17.5% to close at Rs 27.20 on the Bombay Stock Exchange.
Uninor currently has 45 million customers and Telenor, if successful in the spectrum bid, will benefit from a ready customer base. Although the Norwegian telco is hunting for a partner, companies have been allowed to bid even without a local ally. They will, however, have to rope in a partner if they manage to get spectrum during the auctions that begin next month.
Unitech settles with Telenor for Rs 25 crore - The Times of India
