Telenor settles in Russia; fights in India

Telenor yesterday settled one ownership battle, ending its fight with VimpelCom shareholder Altimo, but opened a new front in a 2G license battle in India by ditching local partner Unitech.
 
The Norwegian telco brought the curtain down on a long-running dispute with Altimo over control of Russian operator VimpelCom by acquiring an additional 234 million shares from Weather Investments, another VimpelCom backer. The $374.4 million (€287 million) deal takes the Norwegian operator’s VimpelCom voting rights from 25.01% to 36.36%.
 
Telenor has also secured put and call agreements covering Weather’s remaining 71 million preferred VimpelCom shares.
 
The firm’s increased voting rights make arbitration proceedings against Altimo unnecessary, Telenor chief Jon Fredrik Baksaas says, explaining that the deal with Weather “takes Telenor to approximately the same voting position as a successful outcome of the arbitration process would have achieved.” Baksaas pledged to increase VimpelCom’s board to eleven members, noting the end of arbitration “will enable a more normal corporate governance situation,” at the Russian firm.
 
However, as one fight was resolved, Telenor embarked on another, revealing it will seek compensation from its Indian partner Unitech over the cancellation of 22 2G licenses in the country.
 
The Norwegian telco is seeking indemnity and compensation for the loss of the licenses, and plans to call off its partnership with Unitech once the cancellation is enforced in June.
 
Pål Wien Espen, Telenor’s group general counsel, says the telco believes its contract with Unitech is now broken. “The legality and validity of the licenses was a fundamental term of the share subscription agreement between Telenor Group and Unitech Limited. We believe that the Supreme Court’s cancellation of the Unified Access Service Licenses (UASL) conclusively demonstrates a clear breach of Unitech’s warranties.”

Bahrain operator Batelco has already exited the Indian market following the license decision, revealing it will sell out of its STel joint venture in the market.

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