Tata group paid lenders and govt Rs50,000 cr to offload Tata Tele to Airtel
09 July 2019
Tata Sons, the holding company of Tata Group, paid the Department of Telecommunications Rs10,000 crore in June, over and above the Rs40,000 crore paid to settle loans worth Rs40,000 crore owed by Tata Teleservices (Maharashtra) Ltd.
The Mumbai-based group announced the deal to sell its mobile-phone services business to Bharti Airtel Ltd almost two years ago.
With this the Tata Group has completed repayment of all debt obligations of the consumer mobile business as per schedule, a report in the Mint newspaper cited communication from a Tata Group spokeswoman as saying.
The Tata Group decided o dispose of the phone business in the wake of the huge losses triggered by the entry of billionaire Mukesh Ambani’s Reliance Jio Infocomm Ltd in 2016 offering free telephone calls and low data tariffs.
Jio’s entry forced several small telecom service providers exit the market and sell off unprofitable business while other more entrenched operators opted to merge operations.
While Tata in October 2017 decided to dispose of the unprofitable businesses Tata Teleservices Ltd and Tata Teleservices (Maharashtra) and merge them with billionaire Sunil Mittal’s Bharti Airtel in a “debt-free, cash-free” transaction, Bharti Airtel, which is now the nation’s second-biggest carrier, is under a huge debt pile.