Telenor Group has cut the value of the acquisition of controlling stake in Unitech Wireless by 11%. The investment of Rs 61.2 billion (around $1.2 Billion) initially announced now brings Telenor a stake of 67.25%, up from the original 60%. The new telco floated by real estate major Unitech has licenses for 22 circles and is expected to roll out services by mid 2009.
The infusion would take place in four stages and is expected to end in September this year. The first phase will shortly be completed with this transaction, giving Telenor a 33.5% ownership in Unitech.
The Norwegian telco had announced acquisition of Unitech Wireless in October 2008 for 60% stake.
Repayment of Debt
A cash starved Unitech Wireless has agreed to the new valuation and will use the amount to repay debts. According to Business Standard, of the initial investment of around Rs. 30.5 billion, around Rs. 12.5 billion will be used to repay a loan taken from parent company Unitech Ltd, which itself is struggling for funds.
However, Telenor still seems to be undecided on the means of securing the funding. It planned to secure the amount through a rights issue in Q1 2009 backed by the Norwegian government. Since then, it has decided to look for alternatives. In November, the group roped in Deutsche Bank to help it reassess the means to secure the funding for the acquisition, it said in a December release.
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