Unitech in its petition before the Company Law Board (CLB), in which it accused Telenor and its executives of ‘oppressive and mala-fide actions’ has offered to buy Norwegian partner Telenor’s 67.25% stake in their mobile joint venture. Unitech has offered to buy the stake for Rs.269 crore, escalating hostilities between the two.
On October 4, the Norwegian company had said it valued its India telecom venture at Rs.28 per share, pegging Uninor’s value, excluding debt, at Rs.400 crore. Telenor had bought its stake in Uninor, earlier called Unitech Wireless, in 2009 in a deal that valued the company at Rs.9,100 crore.
Unitech, in its petition, said Telenor’s comments showed that in a span of two years, the value of the company (as per Telenor) had been reduced to Rs.400 crore.
“At this valuation, the inescapable conclusion would be that Telenor has mismanaged the company so badly as to reduce its value to less than 5% of what it has been in March 2009,” it said.
Unitech said if Telenor really believed the value of the Indian venture to be Rs.400 crore, it was “willing to buy out the Norwegian company’s shares at this price”. A Unitech executive said the offer did not include the debt of more than Rs.5,000 crore that Uninor had on its books.
The latest comments mark a new low in relations between the two partners, which have been locked in a war of words for some time. At the heart of their dispute is a proposal for a Rs.8,200-crore rights issue by Uninor, which Telenor supports on grounds the funds are necessary to expand the business, but is opposed by Unitech.
“The simple case here is that the Uninor Board, having followed prescribed processes, has asked its owners to invest more in the company in the absence of bank loans. We continue to urge Unitech Ltd to join us in meeting this shared responsibility towards the company,” Telenor said in a statement.
The two sides have been involved in a public spat during the last couple of months over several issues involving their joint venture, notably management and funding. The Punjab and Haryana High Court recently lifted the stay, granted by a district court in Gurgaon on a petition filed by Unitech, on the rights issue.
Last month, Telenor’s group CEO Fredrik Baksaas had said the company would look at inducting another partner for its Indian operations, if Unitech did not meet its obligations and participate in the upcoming rights issue. Unitech, which is facing a slowing real estate market, contests the need for a rights issue.
It says Telenor had turned down a Rs.9,000-crore loan from SBI after the bank had completed due diligence and agreed to fund Uninor’s expansion plans. It also said its agreement with Telenor categorically stated a rights issue would only be considered if all other funding options had been exhausted.
