Tata Sons Reduces its Entire Investment of Rs 28,651 Crore in Loss-Making Tata Teleservices

Tata group holding company Tata Sons has written off its entire investment of Rs 28,651.69 crore in loss-making telecom arm Tata Teleservices, according to a regulatory filing. Tata Sons are in the process of transferring the consumer mobile business of Tata Teleservices to Bharti Airtel and hiving off the enterprise segment to merge with the group’s networking arm Tata Communications. “The company has considered it appropriate to write off the entire investment of Rs 28,651.69 crore in Tata Teleservices Limited,” Tata Sons said in a filing.

• Make Telecom Talk My Trusted Source
• 
• 

The effect of impairment was reflected on Tata Sons’ consolidated net profit which dropped to Rs 4,379 crore at the end of 2017-18 from Rs 18,432 crore in 2016-17. On a standalone basis, the net profit of Tata Sons increased by 6% to Rs 873 crore in 2017-18 from Rs 824 crore in 2016-17.

According to the filing, Tata Teleservices recorded an impairment loss of Rs 16,891.28 crore, including Rs 1,265.81 crore pertaining to the prior period, on the consumer mobile business assets based on an assessment of its recoverable value.

Tata Sons have also made a provision for claims of Rs 4,393.45 crore for the year ended March 31, 2018, after considering various factors ” including the without prejudice discussions with the relevant counterparties”. The filing said that a subsidiary company had evaluated the recoverable value of spectrum that Tata Teleservices acquired in March 2015 and recorded an impairment loss of Rs 905.41 crore around the same.