Tata Teleservices Maharashtra to sell stake in Viom Networks

Tata Teleservices Maharashtra (TTML) is trying  to sell its telecom tower company, Viom Networks, to tide over the crisis. The share price of the company increased by 3.07 per cent on early trades on the BSE and is trading at Rs 6.81 on intraday basis.

TTML has a debt of around Rs 25000 crore as of FY15. In the past two fiscal years, TTML has received Rs 4500 crore of equity funding from parent Tata Sons but is now looking for other options to repay of loans.

The deal would be signed in the current quarter. TTML has 53 per cent stake in Viom, and will continue to hold a part of its stake. The company is likely to sell half of its stake. Srei Infrastructure which owns around 12 per cent stake in Viom will exit completely. The Viom is expected to be valued at around Rs 19000 crore, including a debt of Rs 6500 crore. As per the expected valuations TTML's stake in Viom is valued at Rs 6875 crore.

On financial front, TTML reported net loss of Rs 3850 crore as of FY15 against loss of Rs 6170 crore during FY14. The company's revenue increased by 6.06 per cent to Rs 751 crore in Q1FY16 as compared to previous fiscal year. The finance cost is one of the biggest contributors to TTML's losses and any plans to cut costs would help the company to get back to profitability faster.

Once the Viom deal is over, TTML will be working with Telenor of Norway for a possible merger with the company. TTML and Telenor have put their merger talks on the fast track and a decision is expected soon.

Tata group is negotiating with NTT Docomo to buy out its 26.5 per cent stake in the company. The matter is currently under arbitration in the London Court of Arbitration over valuation differences, as Docomo is seeking higher valuation.

Tata Teleservices Maharashtra (TTML) holds two Unified Access (basic and cellular) Service Licenses (UASL), one for Mumbai Metro and the other for Maharashtra and Goa service areas. The Company is an integrated player across three segments viz. Technologies, Products and Customer. It provides its range of products and services to about 10.6 million subscribers under the Tata DOCOMO brand. TTML's network consists of more than 15,000 Base Trans Receiver Stations and Optical Fiber Transmission Network of approximately 14,000 kilometers in Mumbai and Maharashtra.