In the midst of a squabble over the valuation of Indian telecom venture Uninor, minority partner Unitech has offered to buy out Norwegian partner Telenor.
Unitech is offering to pay 2.69 billion rupees (€39.8 million) for Telenor's 67.25% stake in the joint venture – far less than the $1 billion (€726 million) Telenor paid when it bought into the business in 2008.
The firm claims the valuation is based on Telenor’s own estimate of Uninor’s total worth, which values the operator at 4 billion rupees, the Economic Times reports. That valuation is some 5% lower than the price of Uninor when Telenor bought in, which points to mismanagement of the operation, Unitech claims in a complaint.
Disputes over management and funding are threatening an already uneasy partnership between Telenor and Unitech. The pair has been publicly sparring over whether to raise funds through a rights issue, which Telenor argues is necessary to pay for continued rollouts.
The Norwegian carrier has previously threatened to find a new partner for Uninor if Unitech does not live up to its funding obligations, but Unitech claims the partnership stipulates that the venture must exhaust all other funding avenues before conducting a rights issue.
While the takeover offer may be more of a strategic play than a serious bid, at least one analyst finds it difficult to believe that Telenor would consider selling out of India at any price likely to be put on the table.