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Updated: Telenor Partners Lakshdeep For Its New Indian JV Telewings

Update: Telenor Group through its new wholly owned Indian entity, Telewings Communications Pvt. Ltd. (Telewings), has signed a partnership agreement with Lakshdeep Investments & Finance Pvt. Ltd (Lakshdeep), a company controlled by Sudhir Valia. This is a financial investment by Valia in his personal capacity, informed the company. Interestingly, according to Valia’s LinkedIn profile, he’s a Director at Sun Pharma.

According to Telenor, Lakshdeep will contribute an agreed amount of equity into Telewings. Upon successful participation in the upcoming spectrum auctions and post all required government approvals, Telenor Group will eventually own 74% of the joint venture. Telenor Group will maintain operational control and upon necessary approvals all assets of Unitech Wireless (Uninor) will be transferred to this company for seamless continuity of operations. Telewings has already applied for prequalification to participate in the upcoming spectrum auction. A final decision on whether to participate or not will be made before the auction starts, the company said.

Earlier: Following the settlement of its dispute with Unitech, and the latter’s exit from the Uninor JV, Norwegian telecom operator, Telenor is expected to partner with one of the promoters of Sun Pharma, according to a report by The Economic Times. The report cites three independent sources saying that one of the family member of the Sun Pharma promoter group is picking up a 26% stake in a new JV with Telenor, in a personal capacity. The report also mentions that the JV will be announced, later today. However, Sun Pharma denied the development and has said that it does not intend to enter telecom. During its earnings call, Telenor CEO Jon Fredrik Baksaas had declined to comment on the new partner

Vodafone’s Pharma friends

If the report turns out to be true, this would not be the first time that a pharma company acquires a stake in a telecom JV with a foreign partner. These stakes are more of placeholders as the Indian government allows foreign entities to hold a maximum 74% in telecom businesses, and pharma companies have little to do with telecom. Piramal Helathcare also owns an 11% stake in Vodafone India. It had first paid Rs 2856 crore for a 5.5% stake, and then bought another 5.5%, earlier this year, for approximately Rs 3007 crore. Similarly, to bid for the upcoming 2G auction Telenor needs an Indian partner, and it would hope that interference on the operations side is minimal.

Telenor and Unitech conflict timeline

– Uninor proposes a rights issue of Rs 6,500 crore, which is challenged by its JV partner Unitech in the District Court of Gurgaon. The court puts a stay order.

– Unitech, on 11 October 2011,  initiates a process before the special judicial body Company Law Board (CLB) by filing a petition against Uninor, the Telenor-appointed directors on the Uninor board, Telenor Asia Pte Ltd. and Telenor ASA, alleging that the respondents have oppressed the minority shareholders and mismanaged the business of Uninor.

– Supreme Court of India cancelled 122 2G licences  issued to nine telecom operators including Uninor by the UPA government in January 2008.

– Telenor accuses Unitech, holding it liable for the breach of warranties related to the cancellation of the licenses. Telenor also holds Unitech responsible for for the failure to obtain spectrum in the strategically critical Delhi circle.

– Meanwhile, Telenor seeks to dump Unitech, seeks compensation and a new partner and transfer all the existing assets of Uninor to its new partner and participate in the upcoming auctions for fresh licenses. Unitech claims that Telenor cannot transfer any assets of Uninor without its consent.

– Telenor threatens to exit India if govt accepts TRAI’s proposals, as reported by The Economic Times.

– The Supreme Court extends the deadline for the auction of 2G licenses which were cancelled by it, from June to 31st August 2012, and has asked telcos whose licenses were cancelled to continue services till 7th September.

– The Department of Telecom (DoT) and Unitech ask the Foreign Investment Promotion Board (FIPB) to make a decision on Uninor’s rights issue only after taking into consideration the pending issues related to the company.

– Uninor’s board members decide to auction its mobile services business and ancillary operations in various circles.

– Unitech exits Uninor. Telenor and Unitech settle all ongoing disputes.

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