Unitech moves Company Law Board against Uninor over asset auction
KV Kamath, the non-executive chairman of Infosys and chairman of the ICICI bank, is optimistic that the Indian economy will see a turnaround soon. Commenting on the reforms process, he said that the animal spirit of the economy had not been slaughtered ye
Real estate company Unitech on Thursday moved the Company Law Board against Uninor’s decision to auction assets of its India telecom business.
Uninor is a joint venture between Unitech and Norwegian firm Telenor, which owns 67.25 per cent in the telco.
Uninor had on Wednesday said that that "in view of the impending Supreme Court mandated cancellation of license on September 7, 2012, Uninor management has decided to conduct an auction of Uninor’s business, including its assets, while the company is still a going concern".
A spokesman for Unitech had then responded that the company would take legal action against the proposed auction.
Uninor plans to transfer all assets and debt into a new company, according to a public auction announcement by the company. This includes the employees, tower infrastructure and customers. It does not include licence or spectrum.
Uninor has valued its assets at Rs 4,000 crore, according to sources.
The company lost all 22 licences it owned following the Supreme Court order issued in February 2012.
The winner of the auction will also have to take all the debt of company on its books.
Unitech has opposed such an auction of assets as it claims that the auction cannot be executed since the two partners are locked in an arbitration process over the company’s rights issue.
Telenor has already expressed an interest to participate in the auction.
"We already have an interest from the Telenor group willing to procure Uninor’s business. Telenor Asia, majority shareholder of the company, has indicated its willingness to participate through an Indian affiliate entity in the auction of the business of the company," the Uninor statement said.
If there are no other bidders, Unitech gets an exit at an auction-determined price. Telenor gets all assets and participates in the upcoming spectrum auction with a new Indian partner.
If someone else bids higher, then both Telenor and Unitech will exit.