Telenor looking at alternatives to rights issue - FT

OSLO (Reuters) - Norway's Telenor is looking at alternatives to its planned rights issue to gain funding for its expansion into India, such as asset sales and cuts in its dividends and investment, the Financial Times said on Wednesday.

Telenor, which announced the 12 billion Norwegian crown ($1.8 billion) rights issue last week, said it had made no changes to its funding plans and declined to comment on whether it was looking at possible alternatives.

Shares in Telenor were up 2.4 percent at 42.70 crowns at 0807 GMT against a 0.8 percent drop in the Oslo bourse benchmark index.

Telenor shares tumbled in the wake of the rights issue decision, which one analyst called "madness" in the current financing environment.

"There is consistent feedback from minority shareholders that in the present circumstances of the financial markets and the lower valuation of Telenor, a rights issue at this point in time hurts," CEO Jon Fredrik Baksaas was quoted as saying by the Financial Times.

Telenor spent $1.1 billion for a 60 percent stake in Unitech Wireless and plans to fund the purchase with the issue, due in early 2009. Standard & Poor's also cut its outlook on Telenor debt to negative after the announcement.

"We are sticking to what we have communicated. No changes have been made," Telenor spokesman Paal Kvalheim said when asked about the report. He declined to comment whether Telenor was examining alternatives to the rights issue.