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Tata pays 500b rupees to complete sale of mobile business
INDIA'S Tata Group paid lenders and the government about 500 billion rupees (S$9.9 billion) to help complete the sale of its mobile-phone services business to Bharti Airtel Ltd, a deal that was announced almost two years ago.
Tata Sons, the group holding company, paid the Department of Telecommunications 100 billion rupees late last month, days after settling all pending loans worth 400 billion rupees owed by unit Tata Teleservices (Maharashtra) Ltd, the Mumbai-based group said.
"All debt obligations of the consumer mobile business of Tata Teleservices have been repaid as per schedule," a Tata Group spokeswoman said in an e-mailed statement.
The disposal of Tata's phone business was part of an industry consolidation triggered by the entry of billionaire Mukesh Ambani's Reliance Jio Infocomm Ltd in 2016. The new operator with deep pockets stormed the market with free calls and cheap data, forcing many of the incumbents, already struggling under a pile of debt, to exit or merge with rivals.
Tata agreed in October, 2017 to dispose of the unprofitable businesses under Tata Teleservices Ltd and Tata Teleservices (Maharashtra) and merge them with billionaire Sunil Mittal's Bharti Airtel, which is now the nation's second-biggest carrier. The deal was termed as a "debt-free, cash-free" transaction.
Besides Bharti and Jio, the other non-state carrier still standing is Vodafone Idea Ltd, which was the result of a merger between Vodafone Group plc's local unit with tycoon Kumar Mangalam Birla's Idea Cellular Ltd. BLOOMBERG