Deal will help stress resolution, say lenders

The transfer of Tata group’s consumer mobile business to Bharti Airtel is expected to lessen the debt burden on lenders and pave the way for further consolidation in the troubled sector.

Though many cases, including Reliance Communication, await resolution, senior bank executives said Thursday’s deal would bring relief to lenders as the telecom assets would move to an operationally-strong entity. According to senior PSU bank executives, the Tata group has conveyed it would stand by it loan clearing commitments. The executives said they expected the group to haggle for concessions (on payment terms), but hoped there wouldn’t be a big impact.

As on March 31, the combined debt of Tata Teleservices and Tata Teleservices (Maharashtra) was over ~34,000 crore (excluding the deferred payment liabilities to the government for spectrum), according to a Crisil report.

Tata group is a special mention account. That means repayments by the group have stayed due between one and 60 days and repayments have never crossed the threshold of 90-days (after which a borrower account is termed as non-performing loan).