Tata Teleservices Asked to Furnish Sale Details With Airtel for Obtaining DoT Clearance

Telecommunications Department (DoT) has asked Tata Teleservices to hand over the details of its sale to the government so that the department can judge who will be responsible for taking over the liabilities of the company once the Bharti Airtel & Tata Teleservices (TTSL) deal is complete. The DoT official who conveyed the news said that Tata Teleservices owes a chunk of money to the government for various purposes. The deal which is going to happen between Sunil Bharti Mittal led-company, Bharti Airtel and Tata Teleservices is going to be a cash-free and debt-free deal. It is necessary that Tata clear all its dues to the government before it proceeds with the merger. As the details of the deal have highlighted, Airtel will be taking over responsibility for paying off Rs 1,500-2,000 crore for spectrum that Tata Tele bought in auctions.

tata-teleservices-airtel-deal

The DoT official said about the matter to ET as “We have asked them (Tata Tele) to share with us which parts of the unified licence they will keep and which parts will get transferred to Airtel… That will determine the entity that will bear the liabilities and according to that, we will raise the dues.”

In another deal, Tata wants to segregate its business and also intends to sell it to Tata Communications, a firm in which government holds 26% stake. The company will be knocking on the department’s doors soon for the clearance of this deal too. Until then, the DoT wants to extract the debt which Tata Tele owes to the governments summing up to Rs 6,000 crore.

Another person aware of the matter said: “If the (Tata Tele) debt remains, then the value of the Tata Comm business will reduce dramatically.”

An official from the DoT made the boundary of the regulations clear as he said: “They (Tata Group) will have to assure that they will pay up their dues before we give any go-ahead.”

Before DoT finalises the total amount that Tata Teleservices owes to the government by going through their paperwork, estimates have already been put out. Unofficial sources who have compiled the numbers of TTSL’s debt have pegged the figure to be north of Rs 10,000 crore given that the company has to pay for the licence fee, spectrum usage charges and one-time spectrum charge(OTSC).

By January 2018, Tata Sons had pared the debt of Rs 17,000 crore which the company owed to a consortium of lenders by State Bank of India. After the move, the total debt of the company came down to Rs 6,000 crore. It was in October last year when Tata Teleservices announced the Airtel deal and proclaimed that it would raise around Rs 20,000 crore from various sources to pare the debt. The company also highlighted that a part of the quoted amount would come from Tata Sons.

As of today, the pleas of Tata Tele’s and its listed unit Tata Teleservices Maharashtra Ltd.’s merger with Bharti Airtel are with the National Company Law Tribunal (NCLT), while another deal of enterprise sale to Tata Telecommunications is on the due diligence stage. In both of these deals, DoT’s clearance will be the last step. When posed with questions, both Tata Teleservices and Tata Communications declined to make any comments.

Arpit spends his day closely following the telecom and tech industry. A music connoisseur and a night owl, he also takes a deep interest in the Indian technology start-up scene and spends rest of his time spilling poetry and stories on paper.

1
Leave a Reply

avatar
Photo and Image Files
 
 
 
1 Comment threads
0 Thread replies
0 Followers
 
Most reacted comment
Hottest comment thread
1 Comment authors
Sudhakar Recent comment authors
newest oldest most voted
Sudhakar
Sudhakar

Docomo will spoil the nsme of airtel also

Recent Posts

Vodafone Idea Responds to Report of Google Eyeing a Stake in its Operations

Vodafone Idea on Friday said that there was “no proposal” that was being considered by its board as it issued...

Xiaomi Mi Box 4K Review: The Best Accessory for Your TV

Smart TVs are becoming a common thing in almost every household now. But still, there are a large number of...

OnePlus 7 and 7T Users in India to Receive OxygenOS 10.3.3 Update

OnePlus has been on a roll announcing updates for its devices. The OnePlus 5T is going get the Android 10...