Unitech battles Telenor over Indian JV auction
India's Unitech has approached the Company Law Board (CLB) to halt the sale of the assets of its mobile phone joint venture Uninor, deepening the rift with its Norwegian partner Telenor, which has expressed its intentions to bid for the assets.
A report in the Economic Times Thursday said Unitech petitioned the CLB to stop the auction and pass an order restraining Telenor from "taking any action in pursuing the sale and transfer of the business and assets of Uninor in any manner". The Company Law Board is an independent quasi-judiciary body in India.
Unitech is the minority owner of Uninor with 32.75 percent, while Telenor owns 67.25 percent.
On Aug. 1, Uninor announced its intention to auction off its assets before the impending court-ordered cancellation of telecom licenses on Sep. 7 this year, so that the winning bidder can continue Uninor's telecom business after the deadline. It had set the minimum price of 40 billion rupees (US$715.4 million), and said all interested bidders must respond by Aug. 6. Telenor within hours said it was willing to buy Uninor with 41.9 billion rupees (US$749.4 million), if no bidders are found. Its move was immediately met with disapproval by Unitech which said it would take legal action.
Unitech also challenged the authenticity of Uninor's Jul. 31 board meeting, where the decision for auction was made, claiming it had vetoed the proposal, Economic Times reported. "It defies logic as to how any transfer of assets can take place in absence of Department of Telecom approval for transfer of licenses," Unitech said.
Telenor wants to scrap the Uninor joint venture and migrate its business to a new company to get new operating licenses, since Uninor's 22 telecom permits were among the 122 in total that were revoked by the Supreme Court back in February, the report said.
The Norwegian operator last week announced about 2,000 layoffs from its 17,500-strong Indian workforce to cut costs and reallocate resources to more profitable regions in the country.