Tata Teleservices pins its hope on Viom stake sale

Tata Teleservices, which has a debt of ~34,600 crore as on March this year, is mulling selling its telecom tower company, Viom Networks, to tide over the crisis.

In the past two financial years, the company has received ~4,500 crore of equity funding from parent Tata Sons but is now looking for other options to repay of loans.

A top official of Viom said sale of the company to a foreign investor was almost certain and the deal would be signed in the current quarter. Tata Teleservices, which has 53 per cent stake in Viom, will continue to hold part of its stake, the official said. A banker said Viom Networks was expected to be valued at around ~19,000 crore, including a debt of ~6,500 crore. At this valuation, Tata Tele’s stake in Viom is valued at ~6,875 crore.

The banker said Tata Tele was likely to sell half of its stake, while Srei Infrastructure – which owned around 12 per cent stake in Viom – would exit completely. The transaction is important for Tata Teleservices as the Tatas cannot keep pumping money into loss-making operations. Tata Sons has already invested ~4,500 crore in Tata Tele to help it repay loans. Besides, for FY15, the company made a net loss of ~3,850 crore on net sales of ~10,870 crore, as against a net loss of ~6,170 crore on net sales of ~10,350 crore the previous financial year. Tata Teleservices debt rose, as it invested another ~5,864 crore for bidding for thirdgeneration-based spectrum blocks in nine circles. The purchase of additional spectrum would add to its debt and delay its cash break even by another two years, said an analyst. An e-mail sent to Tata Teleservices did not elicit any response.

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