Telenor AS announced on Friday it has sought India’s government nod on its bid to acquire full ownership of its local unit in an arrangement worth about 7.8 billion rupees or $131 million, as it seeks it solidify its presence in the world’s second largest telecommunications industry.
“At present, Telenor Group owns 74 percent in its Indian business unit. These investments will be utilized to acquire the remaining stake held by Lakshdeep Investments as a financial investor,” a statement from the company said, as reported by Reuters.
The Norwegian telecommunications firm holds 74% stake in Uninor currently, the local unit by means of which it offers cellphone services in six of 22 telecom service sectors in India. The remainder of shares is owned by Lakshdeep Investments & Finance Pvt Ltd, which is controlled by Sun Pharmaceuticals Industries Ltd.
Telena’s intentions to take full control of its India’s unit comes after a July last year decision by the government to tone down restrictions against foreign investment in telecom firms. Until then, India limited foreign ownership of local firms in the sector to 74%.
The company’s rivals have taken a similar move, including Vodacom Group, which bought out its Indian business earlier this year. Another carrier, Sistema JSFC of Russia, has contacted the government for approval and is awaiting clearance by authorities.
Based in Oslo, the firm said on Friday it has submitted an application with the Foreign Investment Promotion Board, a body of senior bureaucrats that regulates foreign direct investments in India, to increase its grip to 100%. It will pump 7.8 billion rupees to buyout the remaining shares owned by Lakshdeep investments.
According to the Wall Street Journal, Telenor bought new permits in six service sectors in 2012. It acquired another one this year. About 30 million customers use its services in India.
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To contact the reporter of this story; Yashu Gola at yashu@forexminute