The Hindu : Business : Telenor scraps rights issue

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Wednesday, Jan 28, 2009
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Telenor scraps rights issue

Special Correspondent

NEW DELHI: Norwegian telecom group Telenor on Tuesday said it had scrapped its rights issue to fund the Unitech Wireless deal struck last year. Instead, it plans to fund the $1.6-billion investment in the new Indian telecom company by internal accruals and new debt. In October last, Telenor had struck a deal with Unitech Wireless to take 60 per cent stake in the Indian company.

The Oslo-headquartered telecom firm said it had signed an 8-billion Norwegian krone ($1.19 billion) three-year term loan, which might be used to finance the investment in India’s Unitech Wireless, a subsidiary of realty firm Unitech, which has bagged licences to offer mobile services in all 22 telecom circles in India.

“Telenor has decided to propose that there will be no payment of dividend to shareholders for 2008. Furthermore, it is Telenor’s intention that no dividend will be proposed for 2009. A final decision on dividend proposal for 2009 will be made after (the) closing of the financial accounts for 2009,” it added. The Norway Government has a 54 per cent stake in Telenor.

Though both Telenor and Unitech Wireless had earlier said that they would close the deal by the end of January 2009, but now it seems that the deal would be finalised only in the next couple of months. “Closing (of the deal) is subject to certain conditions being fulfilled, and Telenor now anticipates that closing of the transaction will take place during the first quarter of 2009, the Nordic company said.

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