Virtually dumping its partner Unitech, Norwegian telecom major Telenor Group today announced plans to set up a new company for carrying out its Indian operations post Supreme Court quashing its 22 licences.
Telenor also sought damages from Unitech accusing it of "fraud and misrepresentation" of facts based on which it had invested over Rs 6,000 crore in the joint venture with the real estate firm.
"Telenor Group has issued to Unitech a notice of voidance of the current shareholders' agreement with Unitech on account of fraud and misrepresentation on their part as established by the Supreme Court judgement," Telenor Group Director Communications (Asia) Glenn Mandelid said in a statement.
The Norweigan firm wants to transfer the business that was being done under the Uninor brand to the new company, where it will hold 74 per cent stake and may rope in a minority Indian partner.
Expressing shock at Telenor's announcement, Unitech in a statement said, it "cannot be held responsible" for cancellation of licences and shareholders agreement "cannot be terminated by any party unilaterally".
Telenor said the new entity will serve as the platform to approach the upcoming auctions for fresh licences as mandated by the Supreme Court.
"As a part of this process, the new entity will also seek requisite approvals from the FIPB to allow Telenor Group to take up 74 per cent ownership," Mandelid said.
Telenor will seek to transfer Uninor's business, and seamlessly migrate its customers and employees, to the new company, Mandelid added.
"Till such a time, Uninor operations continue as before," he added.
Telenor said it does not need "the 75 per cent shareholders vote" for transfer of the business to the new company as "Uninor is a private company".
On the ability to unilaterally void shareholder agreement, the Norway-based company said, "In case of a fraud and misrepresentation, Telenor can unilaterally declare the shareholder agreement void."
Mandelid said Telenor Group has, for more than a year, tried to secure Uninor's long-term funding needs through a rights offer but the process has been blocked by Unitech.
"Telenor Group has taken full responsibility for the financial security of Uninor by solely and fully guaranteeing for all short-term funding needs," he said.
Telenor Group said it has invested Rs 6,135 crore through equity and over Rs 8,000 crore in debt through corporate guarantees for ramping up Uninor's operations.
Uninor, over period of two years, has secured over 40 million customers, a workforce of over 17,500 and a distribution network with more than 4 lakh points of sale, the statement said.
"In order to ensure a smooth transition for Uninor's employees, customers and stakeholders, we expect that the Uninor Board would, with prior consent from the Indian authorities, transfer Uninor's business into this new company at a fair market value," Mandelid said.
Mandelid added that this voidance will take place with a prospective affect and all rights that have accrued in the past shall consequently stand preserved.
"Till such time that Uninor's business is transferred to the new Indian company, Uninor operations will continue as before. We now trust that the Indian authorities will conduct a swift and fair process such that new competition remains in the market," Mandelid said.
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