Telenor hikes Unitech Wireless stake to 67%
Valuations of new telecom companies are falling. This was clearly visible in Unitech Ltd’s announcement on Tuesday of shedding 7.25 per cent more equity for a previously agreed $1.2 billion in the company.business Updated: Mar 17, 2009 21:38 IST
Valuations of new telecom companies are falling. This was clearly visible in Unitech Ltd’s announcement on Tuesday of shedding 7.25 per cent more equity for a previously agreed $1.2 billion in the company.
On October 28, Unitech announced that it had agreed to sell 60 per cent equity in Unitech Wireless to Telenor for $1.2 billion. The deal envisaged transfer of management to Telenor.
“While Telenor's initial investment under the agreement will continue to be the previously agreed Rs 61.2 billion (about $1.2 billion), it has been agreed that Telenor, after this investment, would be holding 67.25 per cent in Unitech Wireless (subject to regulatory approval),” a Unitech press release stated.
The deal will be completed in four phases. “Upon completion of the first phase of the investment, Telenor’s ownership percentage will be 33.5 per cent.”
This is an indication how recession has effected valuations of new telecom companies. In September, 2008, Telenor had nearly finalised a deal with Datacom for acquiring 51 per cent in the company. Datacom was valued at $1.5 billion. The deal could not materialise due to differences between the two promoters of Datacom — Mahendra Nahata and the Dhoots of Videocon.
In September, Swan managed to sell 45 per cent equity to Etisalat for $900 million, at a company valuation of $2 billion. Etisalat has licences for only 13 circles.