Tata Tele to sell residual businesses to repay banks, gets promoter support

Tata Teleservices, which reported a loss of Rs 13,225 crore for the fiscal 2020, plans to sell its residual business in the current financial year to pay off loans. Tata Sons, the promoter, has promised to provide for till June next year any liquidity crunch the company may face till the sale is completed.

Tata Sons infused about Rs 46,595 crore in Tata Teleservices between January 2014 and December 2019 to fund losses, debt repayments and as capital expenditure. In the current fiscal, Tata Sons will have to infuse additional funds so that the company can pay its AGR (adjusted gross revenues) dues, say bankers.

The Tata group sold off its mobile telephony business to Bharti Airtel last year. Tata Teleservices, since then, offers wireline data, marketing and voice services along with managed services and broadband services under an enterprise business, which has now been put on the block. The company has classified assets worth Rs 2,138 crore for sale, as per its latest financial data for the fiscal 2020.

The Supreme Court last year asked Tata Teleservices to pay Rs 14,000 crore to the government Court as Adjusted Gross Revenue (AGR) dues. The company said for the fiscal year ended March this year, it made provisions of Rs 7,976 crore for the AGR dues. The company’s total liabilities was Rs 15,592 crore for the fiscal 2020.

Based on its own self-assessment of AGR dues, the company had paid Rs 1,708 crore on February this year and paid another tranche of Rs 1,850 crore as AGR dues in March. But after the SC rejected the self-assessment approach to calculate AGR, the company is waiting for Supreme Court’s order on the petition filed by the Department of Telecom seeking its dues in the next 20 years.

Tata Tele was one of the first companies to start wireless telephony services in India and was pan India operator by 2005. In 2009, Tata Sons had sold its 26.5 per cent stake to NTT Docomo but had to buy back the stake at 50 per cent of the sale value for Rs 7250 crore in 2016 after a prolonged litigation both in India and in the British courts. Since then, the financial metrics of the company kept deteriorating and never improved.