Telenor India, the Indian subsidiary of parent company Telenor, held talks with Idea Cellular for selling its entire India unit in a cashless deal. The deal would include Idea Cellular taking over all the liabilities of the Norway-based telecom operator.
Telenor owes the Indian government Rs 1,900 crore in deferred spectrum payments. It also owes Rs 1,800 crore in debt to financial institutions. "The two companies have held negotiations for a transfer of all liabilities and assets without an actual payout," the Economic Times quoted a source as saying.
However, according to other media reports, the talks between the two telecom operators may not lead to a deal being finalised since Idea may not want to add additional debt burden. Idea bought additional spectrum worth Rs 13,000 crore during the spectrum auction in October.
Telenor has spectrum rights in Bihar, Jharkhand, UP East, UP West, Maharashtra, Andhra Pradesh, Assam and Gujarat.
If the deal comes through, it would result in Idea Cellular gaining 4G spectrum in the 1800 Mh band, while Telenor would exit the Indian market, ET added. Since January this year, Telenor has marked down the value of its India business by about Rs 5,000 crore, whereas the write-down of the value of its license was over Rs 4,000 crore.
Telenor did not take part in the recently concluded October spectrum auction, hinting that the company intended to leave the market, where it incurred losses in thousands of crores and struggled to remain afloat.
The Idea Cellular stock was trading at Rs 76.10 at around 1 p.m. on Friday, down 1.17 percent from its previous close on the Bombay Stock Exchange.