The Foreign Investment Promotion Board has cleared a proposal from Unitech Wireless for a rights issue of $1.62 billion, according to media reports in India.
Earlier, Norway-based Telenor Group had said it will proceed with a rights issue of Uninor, its Indian joint venture with Unitech Ltd., despite an ongoing dispute with Unitech over the management and control of Uninor.
Telenor owns majority stake of 67.3% in Uninor; Unitech owns the rest.
“We had applied to the FIPB for an approval for a rights issue of $1.62 billion to secure Uninor’s long-term funding through equity in the absence of bank loans. An approval will allow us to bring in more FDI into India as operating capital to support Uninor’s continuing development. We are unable to confirm the outcome of the application since we haven’t yet received any notification from the authority,” a Telenor representative said, the Economic Times reported.
On Oct. 11, Unitech filed a petition with the Company Law Board against Uninor, the Telenor-appointed directors on the Uninor board, Telenor Asia Pte. Ltd. and Telenor ASA.
Telenor had said that Unitech “is alleging that (Telenor has) oppressed the minority shareholders and mismanaged the business of Uninor. Telenor’s opinion is that there is no legal or factual basis to support the claims and allegations made by Unitech Ltd. in the arbitration and (India’s Company Law Board) proceedings.”
The rights issue has also been okayed by the Punjab and Haryana High Court with a condition. “If the arbitration proceedings between the two partners goes against the rights issue, the whole amount would be treated as debt,” Indian media outlet Firstpost reported.
The relations between the Norwegian company and its Indian partner went bad after the details of 2G spectrum scandal became public, resulting in the jailing of Unitech boss Sanjay Chandra.
