Short of funds, Uninor seeks approval for Rs1,200 cr rights issue
In an interview with NDTV Profit, Union Power Minister Sushil Kumar Shinde talks about the problems the country’s power sector is facing.
Troubled telecom company Uninor has applied to the Foreign Investment Promotion Board (FIPB) seeking permission for a Rs 1,200 crore rights issue.
Funds from the rights issue will be used to meet the operating expenses for Uninor. The application before the FIPB has said that Uninor has not been able to raise money from banks.
This is Uninor’s second attempt at raising money for through a rights issue after its Rs 8,200 crore issue could not get the FIPB nod.
“We continue to face a funding challenge in the absence of a full rights issue or any new bank loans and the continuing uncertainty and delays on the auction rules. We are exploring every available financing option including seeking to revive the FIPB approval process for a limited equity fund infusion to meet immediate funding needs,” Uninor said in a statement.
Under India’s foreign investment norms, Telenor can hike stake in the joint venture to 74 per cent. It has 67.25 per cent stake in the company.
Telecom companies like Uninor, a joint venture between Norway’s Telenor and Indian reality major Unitech, have been facing funding problem after the 2G scam broke and Supreme Court cancelled 122 licences, including that of Uninor, in February.
The Supreme Court has allowed the 122 licences to function till September 7, which is a week after the expiry of the deadline for the auction process for spectrum. Telenor hopes to participate in the spectrum auction and is looking for a new partner for its India operations.
Differences between Unitech and Telenor over Unitech’s exit from the joint venture have also marred the functioning of the joint venture, which has over 40 million subscribers.