The war between Telenor and its Indian partner Unitech has escalated. Uninor, the joint venture between the two companies that provides mobile services in India, today announced that it will auction its existing business, including its assets. In case, it is not possible, it will liquidate the company as its licences will be cancelled on September 7.

The Norway based telecom giant is fighting with its Indian minority partner over corporate governance issues. It has already announced that it will participate in the bids with another Indian partner.

Following is the full statement issued by Uninor management:

“In view of the impending Supreme Court mandated cancellation of license on September 7, 2012, Uninor management has decided to conduct an auction of  Uninor’s business, including its assets, while the company is still a going concern. This will allow the company to generate the maximum possible returns for its creditors and also secure the future of Uninor’s customers, employees and business partners in the hands of new ownership. This process will ensure that the value of the Uninor business is secured beyond September 7 as the winning bidder would have the ability to continue Uninor's business as a going concern beyond September 7, 2012. On the contrary, if the auction process is not followed, the Company would have no option but to be liquidated post September 7, when the Company loses its licences.

As far as Uninor management is concerned, this is the only logical way to proceed as it allows the value built into the company to be preserved and not destroyed once the court ordered cancellation of licenses comes into effect on September 7.

The management is obliged to take this course in light of its duties towards the Company's stakeholders, including its customers, employees, shareholders and partners. More so when we already have an interest from Telenor Group willing to procure Uninor’s business. Telenor Asia Pte Ltd, majority shareholder of the Company, has indicated its willingness to participate through an Indian affiliate entity in the auction of the Business of the Company. 

This process does not have any impact whatsoever on Uninor’s running operations and is expected to have a positive future impact on its customers, employees and partners as the winning bidder would have the ability to continue Uninor's business as a going concern beyond September 7, 2012. If the auction process is not followed, the Company would have no option but to be liquidated post September 7, when the Company loses its licences.”

Meanwhile, Telenor has said that it is willing to participate in this auction and procure all of Uninor’s business which will ensure that the value of Uninor’s business is preserved, and not allowed to be destroyed.