Telenor dismisses all claims by Canal +

At a meeting with Canal+ in December, Telenor presented a draft proposal for an amicable settlement to resolve the dispute. The offer was in the form of various models for part-payment to be made until the case is decided by the EU Commission. No reply to this offer was received, and, a good hour after having presented this offer, Telenor was met instead with a petition for a temporary injunction from Canal+.

The Oslo Court of Execution and Enforcement started its hearing of the case for a temporary injunction on Thursday 3 January. The court shall decide whether Telenor can be forced to temporarily fulfil the sales contract before all the terms and conditions of the agreement have been met. Two days have been set aside for the case. "We dispute Canal+'s view of the matter and are happy to have the opportunity to present our version in court. Telenor has nothing to hide in this matter," said vice president Erik Nord of Telenor Plus.

On 10 July last year the French Group Canal+ SA (Canal+) reached agreement with Telenor on the sale of its 50 per cent shareholding in Canal Digital to Telenor. The agreement has a total value of NOK 2.4 billion, NOK 1.9 billion of which is to be paid in cash. The parties agreed at the same time on a long-term distribution agreement for Canal+'s television channels on Canal Digital's platform in the Nordic countries.

In its petition, Canal+ has stated the claim that Telenor be ordered to fulfil the sales agreement of 10 July 2001 with immediate effect. In his opening argument in the Oslo Court of Execution and Enforcement on Thursday, Telenor's counsel Supreme Court advocate Erik Samuelsen stated that it was Telenor's view that the real intention behind the petition for a temporary injunction was to obtain payment of the sum of NOK 1.7 billion in cash before the terms and conditions of the agreement have been met.

"It is elementary law that, pursuant to section 15 of the Norwegian Enforcement Act, the securing of a sum of money is achieved through an attachment order and not through a temporary injunction. Petitioning for a temporary injunction through the Court of Execution and Enforcement is the wrong means and the wrong court through which to obtain payment of a disputed sum of money, and Telenor both disputes that a valid claim for payment exists and that there are grounds for securing the implementation of the agreement in the Court of Execution and Enforcement. Nor are the conditions for an attachment order present," said Erik Samuelsen.

Furthermore, it is Telenor's view that approval of the distribution agreement by the EU Commission is a crucial part of the sales agreement. The wording regarding necessary regulatory approval in the agreement was chosen precisely with this situation, as well as national competition authorities, in mind. In Telenor's opinion, the parties have had a shared understanding of this since November 2000.

Before Telenor can take over all the shares in Canal Digital, thus becoming 100 per cent owners of the company, it is crucial that access to content is secured. This is precisely what was achieved through the agreement between Canal Digital and Canal+, which ensures that Telenor obtains access to the television content from which Canal Digital obtains its income. It is self-evident that without such access the value of Canal Digital, and thereby of the shares acquired through the sales agreement, will be substantially reduced. It is therefore of vital importance to Telenor that this distribution agreement be approved by the EU Commission. A dialogue with the commission has already been initiated.

Canal+ claims in its argument that a delayed settlement of the sale will constitute a major financial burden for the company. In Telenor's view, this is incorrect. Telenor has undertaken financial commitments relating to the financing of Canal Digital until all the regulatory approvals have been granted. Canal+ is thus indemnified in relation to financial developments in Canal Digital (gearing ratio etc.) at the same time as Canal+ is ensured full control of the development of the company until the acquisition transaction has been completed. This is ensured via representation on the board of directors and a shareholders agreement requiring unanimity in all material matters.

In summary, Telenor has at no point refused to carry out the transaction, but has stipulated the precondition that all the terms and conditions concerning the regulatory aspects be met.

Telenor Plus
Telenor Plus is one of the four core areas in the Telenor group. Telenor Plus supplies communication solutions in the fields of fixed telephony, internet and broadband, as well as television and content services aimed at the private market. Telenor Plus has more than 3,200 employees.

Telenor ASA
Telenor is one of Norway's largest listed companies, with a turnover in 2000 of NOK 37.6 billion and 21,000 employees in Norway and abroad. Telenor is Norway's leading enterprise in the distribution of voice, information, knowledge and entertainment and, in addition to its operations in the domestic market, is engaged in extensive and fast growing business operations in a number of countries in Europe and South-East Asia.