Telenor has announced it expects to close its acquisition of Indian greenfield operator Unitech Wireless by the end of this month. The US$1.1 billion deal – which will see Telenor buy a 60 percent stake in Unitech – was initially expected to close at the end of 2008. However, the deal suffered a setback when doubts emerged over how Telenor would fund the acquisition. The Norwegian-headquartered company previously wanted to fund the deal via a rights issue of NOK12 billion (US$1.7 billion) but its minority shareholders did not support a rights issue in the current economic climate. As a result, in November, Telenor appointed Deutsche Bank to help it evaluate funding alternatives. In a statement issued just before Christmas, Telenor added that “the evaluation of alternatives, including the previously announced rights issue of NOK12 billion, is ongoing and Telenor intends to announce a decision on the funding of the investment at, or prior to, the closing of the Unitech Wireless transaction.”

Unitech Wireless, which is owned by India’s second-biggest real estate developer, is one of the six new companies that were successful in winning Indian GSM licences last year. The company expects to launch services by mid-2009 and invest INR20,000 crore (US$4.4 billion) in the business over the next three years. It has obtained licences to operate in all 22 Indian telecom circles and has been allotted initial spectrum in 16 service areas. For Telenor, the move extends its mobile operations that currently cover 12 countries in Europe and Asia. Telenor is reportedly targeting an 8 percent share of the Indian market, the world’s second-largest mobile market.