Tata Sons to infuse funds into Covid-hit companies
Tata Sons, the holding company of the Tata group, on Friday decided to infuse more cash into group entities that were hit the worst by the pandemic.
According to a person in the know, group firms affected the most were the airline, hotel, housing, and financial services verticals. The board also decided to invest more money in Tata Teleservices, which was dealt a blow by the Supreme Court’s AGR (adjusted gross revenue) verdict.
The board, which held the meeting via a conference call, also discussed debt reduction in several entities, especially Tata Power — which has been severely impacted by the Gujarat government’s decision not to pay higher tariff for electricity generated in its Mundra plant.
The group cleared the annual results for FY20, but did not give a statement regarding the board proceedings on Friday.
The group is facing significant challenges in each business, except TCS. Two of the group’s businesses in Europe — Tata Steel Europe and Jaguar Land Rover — faced production disruptions owing to the pandemic. Both group firms had to shut plants and put workers on furlough. JLR will soon announce a new chief executive to replace outgoing CEO Ralf Speth, who is retiring in September.
The board also discussed the airline and hotel verticals, which are facing the maximum brunt of the lockdown. Tata Sons had invested additional money in Vistara last month, so that the airline could tide over the current turbulence.
Of the ~20,000 crore dividend received by Tata Sons for FY20, a significant portion has been set aside for Tata Teleservices, which has been asked by the Supreme Court to pay ~14,000 crore as AGR dues.
The Tata group wants to keep the funds ready in case the apex court refuses to grant more time to telecom operators, said a person in the know.