Business & Economy

Telenor, Unitech reach agreement to settle all disputes between them

NetIndian News Network

New Delhi, October 11, 2012

Norway's Telenor Group today said it had, on October 10, reached an agreement with Unitech Ltd to amicably settle all disputes between them.

Telenor and Unitech are partners in Indian telecom services provider Uninor, which was one of the companies whose licences were cancelled by the Supreme Court through a ruling in February this year.
"The parties are bound by confidentiality obligations, and are therefore not able to provide any further comments on specific terms and conditions in the settlement. However, it can be confirmed that the parties agree to support the transfer of the business in Unitech Wireless (Uninor) to a new entity (NewCo) controlled by Telenor," a statement from Telenor said.
"Telenor is preparing to participate in the upcoming 2G spectrum auction through this new entity, but will take a final decision on whether to participate at a later date," it said.
According to the statement, Unitech has agreed to dispose of its shareholding in Uninor for a nominal amount. Unitech shall also 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 stands suspended. 
"Subsequent to a successful business transfer and spectrum auction, all disputes and claims between the parties shall stand withdrawn / concluded," the statement added.Norway's Telenor Group had on April 30 this year said that it had, as a precautionary measure, decided to write down its remaining fixed and intangible assets in India amounting to NOK 3.9 billion (NOK 2.6 billion after non-controlling interests).
The Supreme Court of India had, on February 2, passed an order to revoke 122 licences issues to all operators on and from January 10, 2008 by then Communications Minister A Raja, holding them illegal. These included Uninor's 22 licences.
On February15, Telenor had issued a notice to Unitech Ltd saying that it would seek indemnity and compensation following the cancellation of their joint venture's licences by the Supreme Court.
In  a statement at that time, Telenor had said that it was of the view that its strategic partnership with Unitech Limited did not have a future, and it therefore would start the process of looking for a new Indian partner.
Telenor had invested Rs 61 billion (NOK 8.9 billion) for 67.25 per cent ownership in Uninor, and additionally it had also fully guaranteed for Rs 80 billion (NOK 8.1 billion) of short-term debt.