The Cabinet Committee of Economic Affairs (CCEA) has given the green light to Norwegian telecom operator Telenor to raise its stake in Unitech Wireless up to the maximum FDI limit of 74%. Telenor had earlier acquired 49% stake in the company for Rs 2,380 crore and had an agreement with Unitech to scale it up to 67.25%.
Telenor will pay a total sum of another Rs 3,740 crore to increase its stake from current 49% to 67.25%.
Unitech Wireless is a joint venture company of real estate firm Unitech Ltd and Nordic telecom giant Telenor Group. The firm is expected to start services in India end of this year.
Earlier in August 2009, Telenor has received approval of Foreign Investment Promotion Board (FIPB) to raise its stake in the company to 74%, the maximum permissible limit under FDI.
Telenor has acquired 49% stake in the company for Rs 2,380 crore and made investments in two tranches, Rs 1,250 crore in March and Rs 1,130 crore in May. Telenor had an agreement with Unitech to scale it up to 67.25% at a total investment of Rs 6,120 crore.
Telenor is the seventh largest telecom firm in the world in which Norwegian government holds a 54% stake.
With the CCEA approval in place, the company will now complete acquisition of remaining equity by year-end in two additional tranches, reports Business Standard. It plans to start operation across eight circles initially under the brand name Uninor in December
Out of the eight cities, four cities are in south India, two in UP (east & west) and one each in Orissa and Bihar. The company has also expressed its intent to bid for select circles in
upcoming 3G auctions.