Telenor will increase its shareholding in its majority-owned Indian subsidiary, Unitech, due to a weakening in value of the asset caused by the global financial downturn. The Norwegian-based operator had previously agreed to buy 60 percent of Unitech for US$1.2 billion in October 2008. However, while its investment outlay will remain the same, Telenor announced today that its holding will increase to 67.25 percent once the deal is complete. “As part of the closing negotiations we agreed to increase our ownership share, largely due to the macroeconomic development since the deal was made,” Telenor spokesman Paal Kvalheim told Reuters.

The acquisition will be made in four phases, Telenor said in a statement. The first investment phase, which will be completed shortly, will see Telenor take 33.5 percent of the company. Telenor had originally wanted to fund the deal via a rights issue but  shareholders objected to such a move in the current economic climate. Unitech Wireless is one of the six new companies that were successful in winning Indian GSM licences last year. The company has obtained licences to operate in all 22 Indian telecom circles and expects to launch its first services this year.