The Hindu : Business : Telenor buys 60 % in Unitech arm for Rs. 6,120 crore

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Thursday, Oct 30, 2008
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Telenor buys 60 % in Unitech arm for Rs. 6,120 crore

Special Correspondent

The Norwegian company will subscribe to fresh shares

Both companies will approach FIPB for clearance
Unitech Wireless to launch services by mid-2009

— Photo: Kamal Narang

PAN-INDIA PRESENCE: Sanjay Chandra, Chairman, Unitech Wireless, and MD Unitech, along with Sigve Brekke, Executive Vice-President & Head of Telenor, at a press conference in New Delhi on Wednesday

NEW DELHI: Realty major Unitech on Wednesday said it has sold 60 per cent stake in its newly-formed GSM mobile company — Unitech Wireless — to Norway-based Telenor for Rs.6,120 crore. Telenor would invest the amount as equity by subscribing to fresh shares.

As per the deal, the board of Unitech Wireless would be restructured. It will now have four members from Telenor and three from Unitech, with the chairman’s post going to the parent company, while Telenor will appoint managing director of the company.

The deal that pegs the enterprise value of Unitech Wireless at Rs. 11,620 crore will also see the debt of Rs.2,000 crore transferred from Unitech to the telecom venture Unitech Wireless’ balance sheet.

According to Unitech Managing Director Sanjay Chandra, they would approach the Foreign Investment Promotion Board (FIPB) soon regarding the deal and all clearances from the Government are likely by September 2009.

“This is a landmark deal. At a time when lot of foreign exchange is outflowing, this deal will bring in much needed foreign exchange into the country,” he added. Unitech that has pan-India licence and already received spectrum in 13 circles is planning to launch its services by mid-2009.

Commenting on the deal, Telenor Group Head (Asia region) Sigve Brekke said Telenor, in which the Norwegian Government holds 54 per cent stake, would fund this deal through a rights issue of about 12 billion Norwegian Kroner (about $1.74 billion) in the first quarter of 2009.

Telenor Chief Executive Jon Fredrik Baksaas said: “Gaining access to the world’s second largest mobile market is a major achievement for us. By combining Unitech’s strong presence in the Indian market and Telenor’s successful experience in Asia, we will together contribute to growing the industry and developing the mobile market in India.”

Telenor is world’s seventh largest mobile operator having presence in 12 nations, including Pakistan and Bangladesh. It has a subscriber base of 15.9 crore, with Asia contributing 45 per cent of the mobile user base.

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