Telenor ASA (TEL), the Nordic region’s biggest phone operator, agreed to sell a 26 percent stake in its Indian mobile phone operations ahead of an auction of spectrum in the country next month.
Telenor signed the deal with Lakshdeep Investments & Finance Pvt. Ltd, controlled by Sudhir Valia, executive director at Sun Pharmaceutical Industries Ltd. (SUNP), India’s biggest drugmaker by market value, the carrier said in a statement today. Details of the deal were not disclosed. Valia acted on his personal capacity, Telenor said.
The partnership will enable Fornebu, Norway-based Telenor to bid for wireless frequencies in next month’s Indian auction and protect its 140-billion-rupee ($2.61 billion) investment in the country. After the auction, Lakshdeep agreed to contribute equity into the new Indian carrier called Telewings Communications Pvt. Ltd. India limits foreign holdings in a telecommunications company to 74 percent.
Telenor’s venture with former partner Unitech Ltd. (UT), a New Delhi-based real estate developer, was terminated after its spectrum licenses, revoked by India’s highest court over a corruption scandal, became invalid on Sept. 7. Unitech this month agreed to sell its stake in the Uninor venture for a “nominal amount,” according to Telenor.
Citigroup Inc. is advising Telenor on the transaction, the people said.
Telenor shares fell 1 percent to 110.3 kroner at 11:19 a.m. Oslo time, paring this year’s gain to 12 percent.
India will auction about $7 billion in airwaves starting Nov. 12 and Telenor must bid to remain active in the world’s second-largest mobile market. The venture’s services to its more than 45 million customers have been in doubt since the Supreme Court canceled 122 licenses, including Uninor’s, in February because their 2008 sale was manipulated by some bidders.
Piramal Healthcare Ltd. (PIEL) in February agreed to buy an additional stake in Vodafone Group Plc (VOD)’s Indian unit from Essar Group, about six months after making an initial $640 million investment in the division. In August 2011, Piramal Chairman Ajay Piramal said the company expects a return of as much as 20 percent from the investment. Piramal now owns 11 percent of the unit.
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