Uninor, the joint venture between the real estate firm Unitech and Norwegian Telecom company Telenor, has decided to auction its mobile services business and ancillary operations in various circles. In a media statement, the company said that by auctioning its assets, Uninor will ensure that the value of the business is secured beyond September 7, the date its license expires, following the Supreme Court verdict, as the winning bidder would have the ability to continue Uninor's business beyond September 7, 2012. The company will be liquidated if the auction does not take place. What does this mean? - Telenor, which holds 67.25% stake in Uninor, is keen to acquire the business in the forthcoming auction through an alliance partner, with which it may approach the upcoming spectrum auctions. Telenor has stated that Unitech, the other JV partner in the business does not have veto rights as the shareholder's agreement "was based on fraud". So the auction implies no payment to Unitech for its 32.75% stake in the JV. This would mean a write-off of Rs. 10,000 crore of investment for Unitech. This move has been strongly opposed by Unitech. Unitech has said that it would take legal action against the proposed auction, and that it will approach the company law board, as noted by Moneycontrol. - If a bidder quotes a higher price than Telenor and its partner, the company's assets would be sold to that bidder. - If the auction does not take place, Uninor will liquidate the company and wind-up existing operations. Telenor might…
