Uninor?s financial issues have been temporarily resolved, say news reports.
According to Telenor ASA, the company was under tremendous pressure, as its lenders had issued default notices to it. According to latest quarterly result statement issued by Telenor, as of July 23, 2012, Telenor ASA had received total guarantee claims of Rs 33.82 billion and default notice from most of Uninor?s lenders.
The situation became trickier as one of the lenders did not agree to extend the date of payback given to Uninor. The lender then asked for payment under the Telenor ASA guarantee, thereby implying that Telenor ASA faced the possibility of cross-default of payment under the loan agreements.
In sum, as of June 30, 2012, Uninor had Rs 90.19 billion in current interest-bearing borrowings, with financial guarantees from Telenor ASA. Uninor?s loan agreements comprise bank loan provisions coupled with material adverse effect clauses. As of June 30, 2012, Uninor had NOK 1.1 billion in bank guarantees from the State Bank of India with counter guarantee from Telenor ASA.
Now, as per news reports, Telenor has stepped in and settled debts worth Rs 98.09 billion. The company has clarified that the sum shelled out did not amount to refinancing, nor is it permitted to charge any interest towards this amount. It added that the amount was an inward remittance to the banks, and not to Uninor itself.
Issuing a statement in this regard, Uninor said, ??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.?
?Consequently, fulfilling its guarantees, the Telenor Group has directly settled all of Uninor?s loans amounting to Rs 98.09 billion with the respective banks. This allows Uninor to continue its current operations.?
