Tata Sons has won an approval of the RBI to buy Japanese telecom firm NTT DoCoMo’s stake in their struggling joint venture, Tata Teleservices, for Rs. 7,250 crore. The Reserve Bank of India (RBI) last month informed the Finance Ministry that it was “inclined to accept” the proposal of Tata to buy DoCoMo’s 26.5 per cent stake at Rs. 58 per share, half the rate which the Japanese firm originally paid. RBI has sought the Finance Ministry’s views on it, sources said.
When contacted, a Tata Sons spokesperson said, “As you are aware, Tata Sons has made the necessary application to the Reserve Bank of India. The company is awaiting a response.” DoCoMo in July last year announced plans to exit Tata Teleservices, the seventh-biggest mobile phone carrier in India. The exit, it had said, was to happen as per the 2009 agreement with Tatas when the Japanese firm invested USD 2.2 billion in Tata Teleservices.
As per the agreement, it was to get the higher of either half the original investment or a fair value. Unable to find a buyer, Tata Sons in November applied to RBI to purchase the stake at Rs. 58.045 per share – half the price DoCoMo had paid in 2009. But it could not get the requisite approvals in time and DoCoMo earlier this month dragged Tatas to an international court of arbitration.
The Japanese firm had stated that as per the 2009 agreement that formed Tata Teleservices , Docomo can sell the shares if the joint venture fails to meet performance targets in the fiscal year that ended on March 31 last year. Docomo, TTSL and Tata Sons had in March 2009 signed shareholder agreement for business alliance.
Docomo picked up 27.31 percent stake in Tata Teleservices for Rs. 12,924 crore and 20.25 per cent in Tata Teleservices (Maharashtra) Ltd – the listed arm of TTSL – for Rs. 949 crore. Overall, Docomo holds 26.5 per cent in Tata Teleservices.