Mumbai/Delhi,jan.14 :Tata group has received approval from the Reserve Bank of India (RBI) to buy back Docomo’s 26.5 percent stake in Tata Teleservices (TTSL) at a pre-determined price of Rs 58 a share though Price Waterhouse has valued the stake at Rs 23.34 a share, 60 percent lower.
In a breather to NTT DoCoMo, the Reserve Bank of India (RBI) has agreed to a Tata group proposal to buy back DoCoMo’s 26.5 per cent stake in Tata Teleservices at a pre-determined price of Rs 58 a share (Rs 7,250 crore for the entire stake), despite the company’s valuer, Price Waterhouse, estimating the stake at Rs 23.34 a share, 60 per cent lower.
The value of Docomo stake will be Rs 7,250 crore though Price Waterhouse valued Docomo’s stake at Rs 2,915 crore. Getting Rs 7,250 crore from Tatas was one of the pre-decided conditions of the Japanese telecom giant to exit from TTSL. Docomo expressed interest to exit from the loss making company in April 2014, said a Business Standard report. Docomo bought the stake in 2009. According to media reports, Telenor islooking at buying stake in TTSL.
Price Waterhouse valued Tata Teleservices at Rs 11,000 crore against the pre-agreed valuation of Rs 27,000 crore.In 2009, DoCoMo had paid $2.22 billion for 26.5 per cent stake in Tata Teleservices. According to the agreement, the Tata group, which owned 65 per cent stake in Tata Teleservices, was to buy back the stake at least at half the valuation or at the fair market price, whichever was higher than DoCoMo’s purchase price.
In April 2014, DoCoMo had decided to exit Tata Teleservices after the company reported a record loss of Rs 6,166 crore on revenue of Rs 10,452 crore for 2013-14. For the previous financial year, the company had reported a loss of Rs 4,858 crore on revenue of Rs 10,770 crore, even as its net worth was eroded by Rs 1,800 crore in FY13.