In a move that will delay its entry into India, Norwegian telecom operator Telenor has cancelled the 12-billion kroner ($1.7 billion) rights issue planned to bankroll its $1.6-billion acquisition of 60% stake in Unitech Wireless. Telenor will now raise the money through a combination of cash and additional debt. According to a statement issued by Telenor on Tuesday, its investments in Unitech Wireless, which has telecom licences for 22 circles, would start only from the first quarter of 2009-against its earlier schedule of December 2008. Part of the funds were meant to repay the Rs 800-crore that Unitech Wireless owes parent company Unitech, which is under immense pressure to repay debts of Rs 2,500 crore by March 31.
As reported earlier, Telenor has said the flow of funds to Unitech Wireless is subject to the Indian company signing agreements for tower sharing with other players. Industry sources said it was close to concluding such agreements with Tata Teleservices Ltd and Reliance Communications Ltd. "Closing of the Indian transaction is subject to certain conditions being fulfilled. Telenor anticipates that this will take place during the first quarter of 2009. Telenor remains confident that all conditions will be met within the indicated timeframe," the company's statement said. Though India is the world's fastest growing telecom market, adding 10-11 million subscribers each month, analysts have held that for greenfield projects such as that of Unitech Wireless, raising funds and preparing a sound business model would be difficult. The Nordic telecom operator--the world's seventh largest--said, "Telenor has decided to fund its investment in Unitech Wireless in India through a combination of cash flow and issuance of additional debt. As a result of this, Telenor withdraws the previously proposed rights issue of NOK 12 billion." The Norwegian government, which holds 54% stake in the company, declined to subscribe to the issue citing the global financial meltdown. Telenor then appointed Deutsche Bank for alternate funding. The statement issued by the company also said, "Telenor has signed a NOK 8 billion three-year term loan, which may be used to finance the investment in Unitech Wireless." Telenor has a subscriber base of 159 million. Telenor will propose that there be no payment of dividend to shareholders for 2008. Furthermore, it is Telenor's intention that no dividend will be proposed for 2009. A final decision on a dividend proposal for 2009 will be made after financial closure http://www.financialexpress.com/news/telenor-scraps-rights-issue-delays-unitech-wireless-stake-purchase/415870/ ekamber --~--~---------~--~----~------------~-------~--~----~ You received this message because you are subscribed to the Google Groups ""GLOBAL SPECULATORS"" group. To post to this group, send email to [email protected] To unsubscribe from this group, send email to [email protected] For more options, visit this group at http://groups.google.com/group/globalspeculators?hl=en -~----------~----~----~----~------~----~------~--~---
