Tata Asked to Clear $1.3-Billion Government Dues to Close Deal with Airtel: Report

Tata Group could have to clear dues worth around USD 1.3 billion (Rs 9,000 crore) to the government to get a nod for the proposed sale of its mobile phones business to Bharti Airtel, according to a Bloomberg report.

The Department of Telecommunications (DoT) has reportedly asked debt-ridden Tata Teleservices to pay any amount owed to the government before the deal is approved.

Airtel is unlikely to settle the dues, the report added. Moneycontrol could not independently confirm the development.

Tata Group and Bharti Airtel had initiated the deal in October last year.

Tata Teleservice had a subscriber base of around 40 million users at the time of deal announcement, and it has since fallen to around 27 million users now, Bloomberg data reveals.

The amount can be changed, and Tata Group has asked the telecom ministry to lower the dues it is asking for, the report said.

Tata Group is working on contingency plans to close the mobile phones business, a source told Bloomberg.

The two companies had agreed to a “debt-free cash-free” transaction last year, which means that Airtel will not be taking over any of Tata Teleservices’ outstanding debt.

Telecom regulator has in the past also asked companies to clear liabilities before crucial transactions. Vodafone Indian and Idea Cellular were asked to pay Rs 72 billion before the telecom ministry approved the merger. – Money Control

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