Telenor and Unitech have reached a settlement for their Indian joint venture, Uninor, which will see the business transferred to a new entity controlled by the Nordic operator group. Telenor is planning to use the newly-created NewCo to take part in the upcoming 2G spectrum auction in India, although this has yet to be finalised.
Unitech has agreed to dispose of its Uninor shareholding for a "nominal amount" but will continue to hold economic rights associated with its current shareholdings in the operator. Nominees from the Indian company will withdraw from the Uninor board, with all special shareholder rights suspended.
After the transfer of the business and spectrum auction, all disputes between the companies will be withdrawn.
The two companies have been at loggerheads since 2011 when Telenor initiated a US$1.65 billion rights issue at Uninor, warning Unitech to back the move or face being replaced. Unitech then lodged a bid to buy-out Telenor’s 67.25 percent stake, after accusing its partner of being oppressive and acting in bad faith following management and funding disagreements.
The cancellation of Uninor’s 22 2G licences by India’s Supreme Court in February then saw Telenor record an impairment loss of NOK4.1 billion (US$712 million) against the JV for the final quarter of 2011.
Shortly after Telenor sued Unitech on the grounds that the legality and validity of the 2G licences was a “fundamental term of the share subscription agreement between Telenor Group and Unitech”, stating that it was looking for a new partner.