By R. Jai Krishna and Mukesh Jagota
NEW DELHI--The Indian government has decided to allow Norway's
Telenor ASA (TELNY) to reclaim the $304 million it lost because of
a Supreme Court order cancelling all telecom licenses issued in
2008.
The Norwegian telecom company can now use the money to offset
the cost of bandwidth it bought in a government auction in November
last year, a senior federal minister told The Wall Street Journal
late Wednesday.
While the government had already said in October last year that
it would adjust amounts already paid by some companies which lost
their licenses, Telenor's money was stuck.
This is because the 16.58 billion rupees ($304 million) was paid
to get telecom licenses in 2008 by Unitech Wireless Ltd., in which
Telenor subsequently bought a majority stake. In 2012, Telenor took
over the entire company by buying out partner Unitech Ltd.'s
(507878.BY) share.
Telenor and a local investor then formed a new joint venture
called Telewings Communications Pvt. Ltd., into which the Norwegian
company transferred all of Unitech Wireless' assets.
India's Supreme Court in February 2012 cancelled all the 122
permits given in 2008, including all of Unitech Wireless' permits.
It asked the government to conduct fresh auctions for bandwidth got
back from those who lost licenses.
In auctions held in November 2012, Telewings Communications won
bandwidth to offer telecom services in six service areas for a
total of 40.18 billion rupees.
But when the question of the adjustment of the money paid for
the cancelled licenses came up, the government said Telewings
Communications can't be credited with the previous payment because
it is a different entity.
However, a panel of ministers which met Wednesday decided to
offset the 16.58 billion rupees against the pending payments, the
minister said.
"Essentially, the end beneficiary is the same," he added.
A Telenor spokesman did not respond to an emailed question
Thursday.
Write to R. Jai Krishna at krishna.jai@dowjones.com and Mukesh
Jagota at mukesh.jagota@dowjones.com
Subscribe to WSJ: http://online.wsj.com?mod=djnwires