Tata Group pays Rs 50,000 crore to complete merger deal between TTSL and Airtel
BusinessToday.In July 9, 2019
Tata Teleservices (TTSL) and its subsidiary Tata Teleservices (Maharashtra) completed the merger of their consumer mobile businesses with Bharti Airtel last week and Friday, July 12, has been scheduled as the record date "for the purpose of reckoning the equity shareholders and holders of redeemable preference shares of TTML". In a regulatory filing, the latter announced that its shareholders will get one equity share of Airtel in exchange for 2,014 TTML shares on the record date while investors holding fully paid-up, redeemable preference shares will get 10 fully paid-up redeemable, non-participating, non-cumulative preference shares of face value Rs 100 of Airtel in proportion to their holding.
The Tata Group paid lenders and the government about Rs 50,000 crore ($7.3 billion) to help complete the deal announced in October 2017, Bloomberg reported. Tata Sons, the group holding company, paid the Department of Telecommunications Rs 10,000 crore late last month, soon after settling all pending loans worth Rs 40,000 crore owed by unit TTML. "All debt obligations of the consumer mobile business of Tata Teleservices have been repaid as per schedule," a Tata Group spokeswoman told the news agency.
The price wars unleashed by the entry of Mukesh Ambani's Reliance Jio Infocomm in September 2016 not only eroded profitability but also forced consolidation in the telecom sector. While smaller operators such as Aircel and Reliance Communications Ltd shut down, TTSL and Telenor were acquired by Airtel, and Vodafone India and Idea Cellular merged to give the industry a new top cat.
The TTSL-Airtel merger will bolster the latter's spectrum pool with significant additional 178.5 MHz spectrum in 1800, 2100 and 850 MHz bands, all widely used for 4G.
With PTI inputs
Edited by Sushmita Choudhury Agarwal