Norway's Telenor-controlled Uninor today said it will auction all of its telecom business before September 7 when the company becomes unoperational, a move strongly opposed by the firm's minority stakeholder Unitech.
Telenor, which holds 67.25% in Uninor, is keen to acquire the business in the frothcoming auction, Uninor said in a statement.
The Norwegian firm is seeking to scrap the joint venture with Unitech and migrate its business to a new company to seek fresh operating licences as the JV's telecom permits were among the 122 quashed by the Supreme Court in February.
Uninor said it wants to auction the company's business, including its assets, while it is a going concern before the September 7 deadline set by the apex court for winding up of operations of all the firms whose licences had been cancelled.
"Unitech Ltd had dissented and vetoed on Uninor proposal to auction assets. The auction notice of Uninor can best be termed as illegal," Unitech spokesperson said, indicating that the company may initiate legal action is Uninor was to go ahead with the auction.
Uninor said auction will allow the company to generate the maximum possible returns for its creditors and secure the future of Uninor's customers, employees and business partners in the hands of new ownership.
"Telenor Asia Pte Ltd, majority shareholder of the company, has indicated its willingness to participate through an Indian affiliate entity in the auction of the business of the company," Uninor statement said.
Uninor in an auction notice issued today mentioned of the dissent of Unitech nominee director on board of the company.
"The interested bidders may note that the nominee directors if Unitech Ltd and its affiliated companies, the minority shareholders of the company, have recorded their dissent to such an auction," the notice said.
Unitech hold 32.75% stake in Uninor.
Uninor said "an open auction will also remove any dispute around the real valuation of the Uninor business".
Valuation of Uninor has been a major bone of contention between Telenor and Unitech. Unitech is willing to exit Uninor but feels the valuation put by Telenor was a fraction of Uninor's real worth.
Uninor spokesperson said that the value realised from auction will be divided among stakeholders in the ratio of their shareholding pattern.
Telenor, which had accused Unitech of "fraud and misrepresentation" after the licence cancellation order, contested Unitech's claims that it had veto rights to block any asset transfer.
"We believe these are automatically forfeited once it is established that the shareholders' agreement and all rights enshrined in it, was based on fraud. We are willing to establish this in court, should the need arise," it said.