Tata Tele may have to pay dues before merger
The government, which owns 26% in Tata Communications Ltd, may veto the company’s plan to buy the enterprise business of Tata Teleservices Ltd when it comes up for shareholders’ approval unless all government dues are cleared, a telecom ministry official said.
Tata Teleservices owes the government as much as ₹10,000 crore in spectrum and licence fees dues, the official said, requesting anonymity. Tata Communications requires the government’s support as a shareholder to proceed with the acquisition in addition to a later-stage approval from the department of telecommunications (DoT).
“The government has a 26% share in Tata Communications. So in the first stage itself, the government can halt the deal,” the official said. Tata Communications has requested the government to collect the dues at a later stage, when it approaches the National Company Law Tribunal (NCLT) for approval.
Payment of government dues has become a bone of contention between the government and telecom operators as a wave of consolidation has swept through the industry following the entry of Reliance Jio in September 2016. Smaller operators such as Tata Teleservices, seeing little prospect of survival, have sold their businesses to larger rivals.
In October, Bharti Airtel Ltd agreed to take over Tata Teleservices’ consumer mobile busices,
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ness virtually for free. Airtel is acquiring the assets on a debtfree, cash-free basis, except for it assuming a fraction of the unpaid spectrum fees that the Tata group owes to the government.
At that time, Tata Teleservices had also said it was “in the initial stages of exploring combination of its enterprise business with Tata Communications” subject to regulatory approvals.
In the case of Bharti Airtel’s acquisition of Tata Teleservi- the government’s approval will be required after clearances from the Competition Commission of India and NCLT, the person said.
Emails sent to Tata Teleservices and Tata Communications remained unanswered till press time.
On May 8, Tata Sons chairman N Chandrasekaran met telecom secretary Aruna Sundararajan to discuss the closure of Tata Teleservices’ consumer mobile business, as well as Tata Communications’ plan to buy the enterprise business of Tata Teleservices.
On that day, Chandrasekaran had told reporters that the Tata Communications board has to first approve the proposal to acquire Tata Teleservices’ assets.
Goldman Sachs Group Inc.’s planned $600 million stake sale in ReNew Power Ventures Pvt. Ltd will mark the biggest exit for a private equity fund through an initial share sale in India.
ReNew Power, which filed its draft share sale documents on May 8, is expected to sell shares worth around ₹7,500-8,000 crore in the IPO. “The IPO is largely an offer for sale, which again is largely Goldman Sachs looking to offload a large chunk of its shareholding,” a person aware of the company’s IPO plans said on condition of anonymity. “The secondary share sale could fetch them (Goldman) around ₹4,000-4,500 crore (approximately $600-650 million)”
The size of the share sale could change depending on market conditions and investor demand at the time of the actual launch of the IPO, the person said.
The ReNew Power IPO involves a primary fund-raising of ₹2,600 crore and a secondary share sale of 94 million shares. Goldman Sachs alone is selling 79.78 million shares, the ReNew prospectus shows.
“As we are in the quiet period for this IPO, we are unable to comment,” a spokesperson for Goldman Sachs said in an email response. The Indian primary market has been buoyant in the past three years because of private equity-backed IPOs.
In the past three years, 97 companies have raised ₹1.25 lakh crore through IPOs, according to data from primary market tracker Prime Database.
TATA TELESERVICES OWES THE GOVERNMENT AS MUCH AS ₹10,000 CR IN SPECTRUM AND LICENCE FEE DUES MUMBAI: