Indian court clears way for Telenor unit rights issue

Norway's Telenor said on Wednesday an Indian court's decision has "cleared the way" for a proposed rights issue to raise funds for its Indian mobile phone unit Unitech Wireless.

Unitech Wireless had decided to launch a rights issue to meet funding requirements, but the process was halted after Indian real estate firm Unitech, which is Telenor's partner in the Indian venture, obtained a court's "stay order". Telenor had appealed to lift the "stay order".

Telenor said India's Punjab and Haryana High Court had passed an order on Aug 26, which cleared the way for the Indian unit that operates under the Uninor brand name to proceed with the rights issue.

"We welcome this decision as Uninor will be able to raise additional funding from both its shareholders while the arbitration process continues," Glenn Mandelid, a spokesman for Telenor, said in a statement.

"Uninor will continue its efforts to implement its board's decision and proceed towards a rights issue to secure long-term funding for the company," he said.

Telenor said it received the court order on Sept. 2, but did not give details of the order. The company has not disclosed the amount Unitech Wireless is planning to raise through the rights issue.

Telenor's partner Unitech's managing director and the joint venture Unitech Wireless are among 14 individuals and three companies charged by the federal police of involvement in rigging the grant of telecoms licences in 2007/08, which a state auditor said may have cost the government up to USD 39 billion.

All accused have denied any wrongdoing. Telenor has said the events described in the police charges predate its investments in India.

Telenor owns 67.25% of the Indian unit, while the remainder is owned by Unitech.