When realty sneezes, telecom can catch a cold. Amid difficult global market conditions in its core real estate business, Unitech has offloaded a 60 per cent stake in its wireless subsidiary at a relatively modest valuation.
Norway-based Telenor on Wednesday signed a deal with Unitech Wireless, a 100 per cent subsidiary of Unitech, to buy 60 per cent stakes for Rs 6,120 crore ($1.2 billion).
The enterprise value of the company after the investment would be Rs 11,620 crore ($2.3 billion). The company has a debt of about Rs 1,950 crore, out of which Rs 1,200 crore was raised by a consortium of six banks. Unitech has itself extended loans worth Rs 750 crore to Unitech Wireless.
“Subject to regulatory approvals Telenor will hold up to 60 per cent stake in the company,” said Sanjay Chandra, chairman, Unitech Wireless and managing director of Unitech Ltd. However, he did not reveal debt figures.
Only a month ago, Swan Telecom, which has licence for only 13 circles, had sold 45 per cent stakes for $900 million. Unitech has 22 licences with a pan-India access, spectrum in 13 circles, and a 250-strong team Given all that, the deal seems sweet for Telenor.
Telenor will have four members on the board including the managing director, while Unitech will have three members including the chairman.