(Updates share price to close in sixth paragraph)
Feb. 15 (Bloomberg) -- Telenor ASA, the Nordic Region’s largest phone company, will seek indemnity and compensation from Unitech Ltd. for the breach of warranties related to the cancellation of licenses by the Supreme Court of India.
“The legality and validity of the licenses was a fundamental term of the share subscription agreement between Telenor Group and Unitech Limited,” Telenor Group General Counsel Paal Wien Espen said in a statement today.
Telenor entered India by buying 67.25 percent of Unitech Wireless, an arm of Unitech, which still owns the remainder. Their Uninor wireless brand opened to customers in December 2009, using licenses secured by Unitech. The Indian government this month canceled 122 wireless licenses, including 22 to Uninor, following a court investigation into their award. Telenor wrote down $721 million on the venture.
Telenor will seek a new partner to develop mobile services in India, it said. The Norwegian company has invested 8.9 billion kroner ($1.54 billion) for its stake in Uninor, and is also fully guaranteeing 8.1 billion kroner of short-term debt, it said.
The operator, based in Fornebu, Norway, is prepared to participate in a new spectrum auction if no alternatives are available, the company’s Asia chief Sigve Brekke said Feb. 6 in New Delhi. The company will look at “all options” before considering an exit from India, he said.
Telenor shares rose as much as 4.3 percent and were up 3.2 percent at 100.8 at the 5:30 p.m. close in Oslo.
--With assistance from Diana ben-Aaron in Helsinki. Editor: Kim McLaughlin
To contact the reporter on this story: Stephen Treloar in Oslo at firstname.lastname@example.org
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