Telenor India could be forced into bankruptcy, as it has amassed heavy losses while waiting for the long-delayed approvals that would enable it to be acquired by Bharti Airtel.
The unit’s Norwegian parent company registered a net loss of NOK282 million ($35.8 million). Telenor India booked a profit of NOK120 million during the same period of 2017.
If the losses continue, the unit may have to begin bankruptcy proceedings. This would force the authorities’ hand with regard to granting or denying the approvals – a risky strategy that could result in the collapse of the acquisition. If bankruptcy proceedings are initiated, India’s National Company Law Tribunal will appoint a resolution professional to decide whether to see the deal through or sell Telenor India to another buyer.
Airtel originally agreed to acquire Telenor’s Indian operations in February 2017, and while the deal has received a number of regulatory approvals it has still not obtained final clearance to go ahead. Telenor stated in its Q1 earnings report that it expects the deal to be cleared in this quarter.
Telenor Group has already filed its Indian unit as a discontinued operation and removed the unit from its main financial statement.