Dec 07, 2012, 09.57 AM | Source: PTI
The Competition Commission has approved the proposed 51 percent stake sale in Telewings- part of Norwegian telecom major Telenor - to Lakshdeep Investments and Finance Pvt Ltd.
The fair trade regulator said, however, the proposed transfer of business from Uninor to Telewings as well as the increase of Telenor stake to 74 percent in it cannot be considered as intra-group assets transfer.
Telewings Communication Services had participated in the latest round of 2G spectrum auction and emerged successful bidder in six circles- Andhra Pradesh, Bihar, Gujarat, Maharashtra, UP (East), UP (west).
Giving the green signal for the deal, the Commission in its order dated November 29, said it is "of the opinion that the proposed acquisition of 51 percent of the shares of Telewings by Lakshdeep is not likely to have any appreciable adverse effect on competition in India".
Currently, Telenor operates in the country through its joint venture Uninor. Its 22 licences were among the 122 permits cancelled by the Supreme Court in February in the 2G spectrum allocation case. It bid for the spectrum last month through a new company.
As per the notice filed by the companies, Lakshdeep would initially acquire 51 percent shares in Telewings and ultimately hold 26 percent shares in Telewings.
Earlier this week, sources said that Telenor may not be able to avail of the benefit of adjusting Rs 1,658 crore licence fee it paid in 2008 for permits of its Indian venture Uninor in the amount that it has to pay for the spectrum it has won in the recent radiowaves auction.
"Telewings is a different company. It is not eligible (for refund)," an official source had said.
As submitted by the companies, the proposed deal would take place in four steps. Upon Telewings being declared successful in the 2G spectrum auction, Lakshdeep would acquire 51 percent shares in Telewings from Telenor South Asia and Telenor South East.
Once Telewings buys the 2G spectrum requisite licences necessary for carrying on the business operations in India, Telewings would acquire the business of Uninor on a going
Subsequently, on receiving approval from the FIPB (Foreign Investment Promotion Board), the Telenor group would increase its shareholding in Telewings to 74 percent.
The Commission noted that the ultimate holding of Telenor South Asia in Telewings would be 74 percent whereas Lakshdeep would hold 26 percent.
As per the Commission, information provided by the parties said that Telewings is a newly incorporated entity and does not have any turnover.
Since the business/assets of Uninor are proposed to be transferred to Telewings, the value of assets and turnover of Uninor is attributed to Telewings, the order said.
Notice was filed pursuant to the execution of a share subscription and shareholders' agreement between Telenor South Asia Investment Pte, Lakshdeep and Telewings on October 26.