Telenor scraps rights issue

Norwegian telecom group Telenor ASA has scrapped a kroner 12 billion (around Rs 8,700 crore) rights issue to fund the acquisition of upto 60 per cent stake in the Indian GSM licence-holder, Unitech Wireless, an arm of Delhi-based realty firm Unitech.

Additionally, Telenor has also raised a kroner 8 billion (Rs 5,800 crore) 3-year term loan and the company intends to fund the Indian acquisition together with this loan and cash saved from the scrapped rights issue.

The Norwegian group has decided to propose that there will be no payment of dividend to shareholders for 2008 and 2009 as well. “A final decision on dividend for 2009 will be made after closing of the financial accounts for 2009,” the company said in a statement issued here today.

It further added, “Telenor has decided to fund its investment in Unitech Wireless through a combination of cash flow and issuance of additional debt. As a result of this, Telenor withdraws the previously proposed rights issue of kroner 12 billion.” The rights issue was originally to be subscribed by the Government of Norway, which owns 54 per cent stake in the company.

According to a Reuters report from Oslo (Norway), Telenor now expects to complete the acquisition of Unitech Wireless stake by the first quarter of this year. This is against an earlier indication of completing the acquisition by January-end.

“Closing the stake acquisition is subject to certain conditions being fulfilled, and Telenor now anticipates that closing of the transaction will take place during the first quarter of 2009,” it said, quoting a Telenor statement. On October 28, 2008, the Norwegian firm had signed an agreement to acquire a 60 per cent stake in Unitech Wireless for Rs 6,120 crore.