Telenor may invest up to $2.24 bn in Unitech Wireless
Norwegian telecom major Telenor has informed the Indian government that it plans to invest up to Rs 11,200 crore ($2.24 billion) in Unitech Wireless and has also sought approval to increase its stake in the telecom company to up to 74%.
The original deal signed in October 2008 involved Telenor buying 60% stake in Unitech Wireless for Rs 6,120 crore. But, last month, the cash strapped realtor had agreed to give away an additional 7.25% stake in its mobile phone business to Telenor at no additional cost in return for not having to pump in more funds into the JV for the next two years and higher repayment of debt.
Telenor’s actual investment in Unitech Wireless will be anywhere between Rs 6,120 cr and Rs 11,200 crore since it cannot hold more than 74% stake in the Unitech Wireless. Under Indian regulations, the maximum FDI that is allowed in the telecommunications space is 74%.
With Telenor seeking permission to invest an additional Rs 6,070 crore than what was earlier announced, the larger implication is that its Indian partner Unitech must invest proportionally to retain its 32.75% stake in its telecom arm.