Subodh Bhargava, Chairman of Tata Communications said there is a possibility of Government considering a residual stake sale today. Tata may not have the first right on the residual stake buy. They don't have any proposal on integrating the telecom companies.

But the Telecom Ministry has reverted back on the news saying there's no question of selling 26%residual stake in Tata Communications.

Excerpts from CNBC-TV18's exclusive interview with Subosh Bhargava:

Q: Any truth to that report as far as you know or have heard of that the government is selling its residual stake?

A: I have got the report from the newspapers only, but government does take a stock of such alternatives from time-to-time and it could be that they would consider this in today’s meeting.

Q: Would the land issue have to be resolved before they take a call on whether they want to sell the residual stake and what would be the resolution you look forward to in terms of the land sell?

A: It would be desirable if it is resolved, but in commercial terms or valuation terms, it does not impact any shareholder because current shareprice in the market I reckon is after factoring the land valuation for those 74% shareholders who would be there on the day of the transaction. As far as VSNL is concerned, we have really no views in terms of resolution whether it is siphoned off in a residual company with the shareholders as per the agreement or it is converted into cash and then the shareholders get the benefits, which is due to them. My expectation is only the earlier it is resolved the better it is.

Q: When was Tata Communications' last communication with the government about this stake and plans for this stake?

A: Tata Communications is really not involved in this process at all. The management of BSNL has nothing to contribute in respect of government’s decision to divest or no. What we believe is that we have Government Nominee Directors of the Board and they have been very supportive and encouraging for the growth, which Tata Communications has achieved, and is targeting in future partnership as a shareholder or tomorrow as not being a shareholder, we would continue to look forward to that support from government.

Q: If indeed decision is taken today, would the Tatas exercise their option of a first right of refusal on that stake?

A: From my understanding, there is no such first right now; that was earlier there was a time period, but in any case the answer to that question would have to come from the Tata side, who have the holding. We in VSNL management team or the board are not really involved in this.

Q: So as far as you understand the government is free to sell it to any party, not necessarily give you the first right?

A: That is my understanding because there was a window where Tatas were to exercise the option subject to the fair price etc, but that window was there in February 2007 sometime and thereafter the shareholders would be free to offload the manner in which they would like.

Q: What is your own feeling as Chairman of Tata Communications, do you think the Tata’s would be interested to hike their stake?

A: It all depends on the price. The company has done very well, it has got very aggressive growth plans, the globalisation has really been very successful. Therefore I would say it’s an attractive script, because as a management control having more than 51%, is not going to impact as I take it. Going forward perhaps it is more a financing transaction rather than a management or control issue.

Q: On a separate note in any of the recent board meetings of Tata Communications, has the prospect or the possibility of an integration of the telecom companies of the Tatas being discussed at all where Tata Teleservices with Tata Communications?

A: No. I think that is more a synergy integration vis-à-vis the infrastructure sharing etc. or maybe technology dimension. But on an operational side or the entity enterprise restructuring has not come up at all.