Mumbai: Tata Teleservices, which reported a loss of Rs 13,225 crore for the financial year 2020, is planning to sell its residual business in the current financial year to pay off loans.
Till the sale is over, Tata Sons, the promoter of the company, has promised to provide for any shortfall in liquidity of the company till June next year.
The company also announced a record accumulated losses of Rs 48,907 crore for the financial year 2020. Between January 2014 and December last year, Tata Sons has infused about Rs 46,595 crore in Tata Teleservices to fund the latter’s losses, debt repayments as well as for capital expenditure.
In the current financial year, Tata Sons will have to infuse additional funds so that the company can pay its adjusted gross revenues (AGR) dues, say bankers.
The company sold off its mobile telephone business to Bharti Airtel last year. It now offers wireline data, marketing and voice services along with managed services and broadband services under the existing enterprise business — which has now been put on the block. The company has classified assets worth Rs 2,138 crore for sale, as per its latest financial data for the FY20.
Tata Teleservices was asked to pay Rs 14,000 crore to the government of India by the Supreme Court last year as AGR dues.
The company said for the financial year ended March 31, it made provisions of Rs 7,976 crore for the AGR dues. The company’s total liabilities were Rs 15,592 crore for the financial year 2020.
Based on its own self-assessment of AGR dues, the company had paid Rs 1,708 crore in February and another tranche of Rs 1,850 crore as AGR dues in March.
But after the SC rejected the self-assessment approach to calculate AGR, the company is waiting for Supreme Court’s order on the petition filed by the department of telecom seeking its dues in the next 20 years.
Tata Tele was one of the first companies to start wireless telephone services in India and was the pan-Indian operator by 2005. In 2009, Tata Sons had sold its 26.5 per cent stake to NTT Docomo but had to buy back the stake at 50 per cent of the sale value for Rs 7,250 crore in 2016 after a prolonged litigation, both in India and in the British courts. Since then, the financial metrics of Tata Tele kept deteriorating and never improved.
By arrangement with Business Standard.