9:32 PM
Japan's DoCoMo to exit JV with Tatas, sell stake at deep discount
JAPANESE telecom giant NTT DoCoMo on Friday said it planned to exit (he loss-making joint venture with the Tata Group by selling its 26.5 per cent stake, possibly at a deep discount. NTT DoCoMo plans to sell by June the entire 26.5 per cent stake in Tata Tclcservices it had bought for 266.7 billion yen (USD 2.61 billion) in 2009 and 2011.
Tata Tele offers wireless mobile sen ices throughout India. Vodafone is rumoured to be interested in picking up the stake, though the company declined to offer any immediate comments.
Tata Sons Ltd - the holding company of Tata Group - may buy the stake if it wants to retain control over Tata Tele and does not want its merger with firms like Vodafone.
The Japanese firm said that as per the 2009 agreement that formed Tata Telescrviccs. DoCoMo could sell the shares if the joint venture failed to meet performance targets in the fiscal year that ended on March 31.
The sale price would be 50 per cent of the acquisition price, which came to Rs 7.250 crore. or a fair market price, whichever was higher, it added. DoCoMo, in a press statement, said that "its Board of Directors resolved today to exercise option for the sale of the company's entire stake (124.9 crore shares, or about 26.5 per cent stake) in Tata Teleservices Ltd (TTSI.)".
Tata Soas. in a statement, said it was not possible to predict how-events would unfold.
■ However. Tata Soas is cognizant Of its responsibilities, and will act keeping in mind the interests of all stakeholders and in accordance with law. TTSL continues to be an integral part of the Tata Group," it said.
Tata Tele offers wireless mobile sen ices throughout India. Vodafone is rumoured to be interested in picking up the stake, though the company declined to offer any immediate comments.
Tata Sons Ltd - the holding company of Tata Group - may buy the stake if it wants to retain control over Tata Tele and does not want its merger with firms like Vodafone.
The Japanese firm said that as per the 2009 agreement that formed Tata Telescrviccs. DoCoMo could sell the shares if the joint venture failed to meet performance targets in the fiscal year that ended on March 31.
The sale price would be 50 per cent of the acquisition price, which came to Rs 7.250 crore. or a fair market price, whichever was higher, it added. DoCoMo, in a press statement, said that "its Board of Directors resolved today to exercise option for the sale of the company's entire stake (124.9 crore shares, or about 26.5 per cent stake) in Tata Teleservices Ltd (TTSI.)".
Tata Soas. in a statement, said it was not possible to predict how-events would unfold.
■ However. Tata Soas is cognizant Of its responsibilities, and will act keeping in mind the interests of all stakeholders and in accordance with law. TTSL continues to be an integral part of the Tata Group," it said.
In Tokyo. DoCoMo Chief Executive. Kaoru Kato Kalo blamed thejoint venture's poor performance on a delay in introducing 3G mobile networks that could carry high-margin data services.
The joint venture has seen its mobile subscribers fall by a fifth to 63.14 million in less than two years, according to telecom regulator TRAI's data.
DoCoMo. TTSL and Tata Sons had in March 2009 signed a shareholder agreement for business alliance. DoCoMo picked up 27.31 per cent stake in Tata Teleservices for Rs 12.924 crore and 20.25 per cent in Tata Telescrvices (Maharashtra) Ltd - the listed arm of TTSL - for Rs 949crore. Overall. DoCoMo holds 26.5 per cent in Tata Telescrvices.
TTSL has been struggling in the market. Its listed subsidiary Tata Tcleservices Maharashtra Ltd (TTML) is a loss-making unit.
Posted in: News 2014
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