The Department of Telecommunications (DoT) has conveyed to the Foreign Investment Promotion Board (FIPB) that Unitech Wireless will have to get security clearance for its proposed new Indian investor, as well as furnish the rights issue price and the number of shares subscribed by its Indian and foreign investors.
FIPB had last week discussed a revised proposal from Unitech Wireless, in which Norwegian telco Telenor has a 67 per cent stake, to raise Rs 1,200 crore through a rights issue. The proposal was deferred in the meeting. In May, the company had gone to the board with a proposal to raise Rs 8,250 crore through a rights issue.
Telenor, which is fighting a bitter battle with its partner Unitech Group, had made it clear it would be bidding for the second generation (2G) spectrum in the coming auction, but through a new partner and may be through another company.
At present, realty major Unitech Group controls 33 per cent stake in Unitech Wireless.
Yesterday, Unitech Wireless gave a notice to auction its running business in 13 circles to the highest bidder through an auction with a base price of Rs 4,000 crore. Telenor declared that it was an interested party for bidding in the auction.
The Unitech Group went today to the Company Law Board to challenge the decision of the board. Unitech has also rejected the rights issue proposal and shot off a letter to FIPB, expressing its opposition to the proposal as the issue is under arbitration.
In its communication to FIPB, the department has opined its views on the issue continued to be the same as they had given when the previous application of Unitech came to the FIPB in May this year.
DoT has said any new Indian investor will have to be cleared by the ministry of home affairs before it makes any investment. Foreign direct investment at any point of time should not exceed 74 per cent and would be brought from existing foreign investors only. The applicant had to furnish the rights issue price and the number of shares subscribed by Indian and foreign investors before FIPB. It would be appropriate to take a final view after taking into consideration various legal cases in the Supreme Court and various ongoing issues in DoT like the request for amalgamation of seven companies, it added.