A busy time for Telenor
16 February 2012 |
Telenor acquires additional shares in VimpelCom, settling its arbitration claim against other shareholders in the business; meanwhile it commences battle for compensation following the cancellation of partner Uninor’s 22 Indian licences.
Telenor has purchased 234,000 preferred shares in VimpelCom from Weather Investments for over $374 million, increasing its voting share from 25% to 36.36%. Weather is the investment vehicle through which Egyptian billionaire Naguib Sawiris holds his interests in VimpelCom.
Telenor had opposed VimplelCom’s acquisition of the former Orascom Telecom, which Sawiris sold to VimpleCom in 2011. Telenor had publicly declared its fears that the acquisition would dilute its own stake in the business.
As a result of the acquisition, Weather became the largest shareholder in VimpelCom, holding over 29% of shares. Telenor was pursuing legal action against the company and other shareholders, including Altimo Holdings and Investments.
As a result of the transaction, Telenor has again become the largest shareholder in VimpelCom and has withdrawn all its claims against the company’s other shareholders.
Telenor’s CEO, Fredrik Baksaas, declared that he was happy with the purchase, saying: “This transaction takes Telenor to approximately the same voting position as a successful outcome of the arbitration process would have achieved.”
Meanwhile, Telenor has turned its attention to matters in India. Earlier this year, the Supreme Court of India revoked 122 licences which were issued to operators in 2008. These included all the licences issued to Uninor, owned by Telenor’s strategic partner in India, Unitech Limited.
Telenor has now issued notice that it holds Unitech Limited liable for breach of warranty related to the cancellation of the licences. It is seeking indemnity and compensation for all investment, guarantees and damages caused by the Supreme Court order.
“The fact is that Uninor as a consequence of the judgment will no longer hold any Unified Access Service Licences,” said Pål Wien Espen, Group General Counsel, Telenor Group.
Telenor had invested INR 61 billion for 67.25% ownership in Uninor, as well as guaranteeing INR 80 billion of short-term debt.
Telenor has declared that the strategic partnership with Unitech does not have a future, and that it has started the process of looking for a new Indian partner.