Uninor is a joint venture between Norwegian firm and Indian mobile phone company, Unitech Wireless, in which the later held 67 percent stake. It had raised short-term loans from Indian banks, which Telenor had guaranteed.
Following the Supreme Court’s February 2 decision, Uninor lost 21 licences which led to legal battle between the two. After this many banks became reluctant to lend to telecom operators. The cancellation of licences only added to lenders’ concerns.
“Lending banks have claimed under the guarantees. Consequently, fulfilling its guarantees, the Telenor group has directly settled all of Uninor’s loans with respective banks. This allows Uninor to continue its current operations,” Telenor said in a statement.
It said that its move to settle Uninor’s loans allowed its Indian arm to continue operations. The Norwegian company was forced settle the loans after some of the lenders had issued default notices to Uninor.
“One of Uninor’s shareholders has repeatedly refused to fund the company through its own funds and has also actively worked to stop the majority shareholder from doing so. In the absence of a rights offer, Uninor has relied on short term loans from Indian and International banks that were fully guaranteed by Telenor Group.