Tata Sons will pay the majority of an INR100 billion ($1.4 billion) debt its Tata Teleservices unit owes the government, even though Bharti Airtel has formally assumed responsibility, The Economic Times (ET) reported.
Airtel, which is acquiring the TTSL mobile business, told the Department of Telecommunications (DoT) it would cover the sum, which includes payments for licence fees, spectrum usage bills and a one-time spectrum charge. But ET said the money will “likely” come from Tata Sons, which is selling to Airtel on a cash-and debt-free basis.
It was suggested Tata Sons is looking to get the deal wrapped up as soon as possible to get rid of the struggling mobile operation. From Airtel’s point of view, it will give it additional customer reach and spectrum to take on the newly-combined Vodafone Idea, while also giving it headroom over new-entrant Reliance Jio.
DoT approval is apparently the final hurdle for the deal. The regulator has said the money it is owed must come from the licence holder, which would explain why Airtel has said it will make the payment even if the cash originates from Tata Sons.Subscribe to our daily newsletter Back