Tata Tele Sell stake In ATC’s India Mobile Tower Arm, To Settle Dues

Tata Teleservices has offered to sell half or 13% of its stake in mobile tower company ATC TIPL to majority shareholder American Tower Corporation (ATC) for Rs 2,940 crore. IDFC is also selling its entire stack of 2% in ATC.

Tata Teleservices Ltd will also pay Rs 2,360 crore, to ATC Telecom Infrastructure Pvt Ltd for premature termination of its lease obligations following closure of its mobile services business and its affiliates, according to a regulatory filing by ATC.

“Tata Teleservices delivered to the company notice of exercise of their put options under the shareholders agreement with respect to 50% of their combined holdings with Tata Sons of ATC TIPL,” the filing said.

TTL will have option to sell another 50% stake in ATC TIPL in the beginning of the next fiscal.

Additionally, IDFC delivered ATC’s notice of exercising its put option under the shareholders agreement with respect of 100% of its holdings of ATC TIPL.

“The company expects to complete the redemption of the put shares, subject to regulatory approval, for total consideration of Rs 29.4 billion (approximately $400.0 million) in the first quarter of 2019,” the filing said.

ATC, had bought 51% stake in Viom from Tata Teleservices Ltd and SREI Infrastructure Finance for Rs 7,635 crore in October 2015. After acquiring majority stake, ATC named the firm as ATC Telecom Infrastructure Private Limited. The firm is the second-largest private telecom tower company in India and has around 78,000 mobile towers. Tata Teleservices’ had retained 26% stake in Viom Networks.

ATC later merged its wholly-owned subsidiary with ATC TIPL, which increased its shareholding in the tower firm to 63%. The rest of the stake in ATC TIPL is held by Tata Sons, Tata Teleservices, IDFC Private Equity Fund III, Macquarie SBI Infrastructure Investments Pte Limited and SBI Macquarie Infrastructure Trust.

TTL, which was also one of the tenants of ATC TIPL for mobile services, will pay a one-time settlement charges to ATC TIPL, as it closed its mobile services business. “As part of the arrangement, the company will receive an upfront one-time “INR-denominated cash payment” equal to approximately $320 million for the termination of lease obligations with Tata Teleservices in India,” the filing said.

This move paves way for the Tata group to close its agreement with Bharti Airtel which mandates that the conglomerate would need to clear all liabilities from earlier pacts. The telco entered a “cash free debt free” deal with Sunil Mittal-owned Bharti Airtel this year. The deal is yet to get all regulatory approvals.

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