Unitech to sell its entire Uninor stake to Telenor; stocks jump 14%
Ending months of feud, realty major Unitech said it will exit from the telecom joint venture with Telenor by selling its entire 32.75 percent stake to the Norwegian firm.
New Delhi: Ending months of feud, realty major Unitech on Thursday said it will exit from the telecom joint venture with Telenor by selling its entire 32.75 percent stake to the Norwegian firm.
Telenor, which held 67.25 percent stake in the JV firm Unitech Wireless that runs under Uninor brand name, said in a separate statement that it is preparing to participate in the upcoming 2G spectrum auction through a new entity.
Telenor and Unitech had been at loggerheads ever since the Supreme Vourt in February cancelled Uninor's 22 telecom permits. Telenor wanted to scrap the JV and transfer the business to a new firm and get fresh license. Both were engaged in legal battle in courts and the Company Law Board.
"Telenor and Unitech are pleased to announce that on October 10, 2012, they have reached an agreement to amicably settle all disputes between the two parties," the two firms said in a separate but almost identical statements.
Unitech and Telenor said they have agreed to transfer the business in Uninor to a new entity controlled by the latter.
"Unitech has agreed to dispose of its shareholding in Uninor for a nominal amount," it added. They, however, did not disclose the amount Unitech is getting for exiting Uninor.
Unitech said its nominees will withdraw from the Uninor Board with immediate effect.
"Subsequent to a successful business transfer and spectrum auction, all disputes and claims between the parties would be withdrawn," Unitech said. The realty firm, however, said the company would continue to retain its "economic rights" associated with its current shareholding in Uninor.
With the settlement of disputes with Telenor, Unitech will focus on its core business of real estate.
"We are pleased with the settlement reached between Unitech and Telenor. All existing disputes with Telenor are suspended and will be withdrawn upon successful transfer of business of Uninor to a new entity controlled by Telenor," Unitech Chairman Ramesh Chandra said.
After the announcement of the settlement, the shares of Unitech rose as much as 14 percent on BSE in intra-day trading.
Telenor said it is preparing to participate in the upcoming 2G spectrum auction through a new entity.
However, the company said it would take a final decision on whether to participate at a later date.
Unitech and Telenor did not provide further details about the specific terms and conditions of the settlement, citing confidentiality clause.
Unitech, the country's third largest real estate firm, said that with the settlement of disputes with Telenor, the company would be able to have more focus on its core business of real estate and would monetise land parcels across the country for enhancing the stakeholder?s value.
"With the renewed management focus and bandwidth we see Unitech in an advantageous situation to further consolidate its core competency in the business of real estate," Chandra said.