NTT Docomo to sell Indian stake
Written by Dawinderpal Sahota
28 April 2014 @ 09:59
Japanese operator NTT Docomo has put its stake in Indian operator Tata Teleservices up for sale. The Japanese firm has a 26.5 per cent stake in the Indian operator, which it acquired in 2009. But Docomo intends to sell its stake back to its JV partner Tata Group.
Tata Teleservices has struggled in the Indian market. Its subscriber base shrunk from 74.3 million in March 2012 to just 55.9 million in March 2014, according to Informa's WCIS. The firm also recorded significant losses since Docomo became a partner, posting losses of 5.17bn rupees ($85m) in the 2011-2012 fiscal year and 6.58bn rupees in the 2012-2013 fiscal year.
Under the agreement signed in 2009, in the event that Tata Teleservices fails to meet certain specified performance targets, Docomo is entitled to sell Tata Group its shares for 50 per cent of what the Japanese firm paid at the time, which amounts to 72.5bn rupees, or a fair market price, depending on which is higher. Docomo said that it plans to exercise this right by June 2014.
"It is uncertain how the option will be performed, however, and Docomo is not able to predict how events will unfold," the Japanese firm said in a statement. "The effect on Docomo's corporate earnings for the fiscal year ending March 31st, 2015 cannot be forecast at this time due to these uncertainties."
Tags: India, ntt docomo, Tata Group, Tata TeleServices
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