Despite being caught up in the thick of the 2G spectrum scam rocking India – with its chairman in jail facing charges in the corruption scandal – the joint venture between realty firm Unitech and its Norwegian partner Telenor is bullish on the local market and raring to go forward.
“It is a long-term investment,” Sigve Brekke, managing director of Unitech Wireless (Tamilnadu) Pvt Ltd, told HT in an interview.
“We remind ourselves that India is a relatively low penetration market and a young democracy and nothing has changed. That is why we try to see beyond turmoil.”The company has recently raised a debt of R5,000 crore on the guarantee of Telenor to meet its immediate funding requirements. Norway-based Telenor owns 67% equity in UWL. The remaining 33% is owned by the Unitech. Sanjay Chandra, a promoter of Unitech and chairman of UWL has been chargesheeted in the scam involving improper allotment of wireless spectrum to new players, of which UWL is one.
Though he denies any wrongdoing, he is currently in Tihar jail and his trial is casting a shadow on the future of UWL which Telenor is trying to save by asking Chandra to quit.
“We want Sanjay Chandra to step down. He is chargesheeted in the case and if he continues as chairman, there is a conflict of interest. We want Unitech to appoint a new chairman,” said Brekke.
As per the shareholders agreement, a decision on it may be taken in the next board meeting that is likely to be held within a month.
Another major dispute between the two parteners is related to the funding of the project. When the two companies signed agreement, it was agreed that the total funding requirement would be R15,000 crore.
Telenor brought in R6,100 crore of equity, while Unitech’s contribution was R600 crore. In the current scenario, the banks are not willing to give debt to any telecom company. They have to raise funds through right issues. The cash-short Unitech, however, approached a court opposing a rights issue that could erode its hold over the company.
On the current turmoil in the telecom sector, Brekke said, “Telenor is willing to put in more money. We are not here to quit. We are here to win. This is how we have operated in all the markets.
“I am quite satisfied that our operations are not hurt. We have 35 million subscribers and our revenue growth is 45% on a quarter-to-quarter basis.”