The move comes soon after the Tata Group announced that the consumer mobile business of TTML as well as that of Tata Teleservices (TTSL) will be taken over by Bharti Airtel on a debt-free, cash-free basis.
Tata Teleservices (Maharashtra) Ltd (TTML) today said its board of directors have cleared a proposal for raising up to Rs 20,000 crore through an issue of preference shares to promoters or via debentures.
The move comes close on the heels of the Tata Group announcing that the consumer mobile business of TTML as well as that of Tata Teleservices (TTSL) will be taken over by telecom giant Bharti Airtel on a debt-free, cash-free basis.
"... the Board of directors of the company at its meeting held on October 18, 2017 has approved raising of additional funds up to an aggregate amount of Rs 20,000 crore...," Tata Teleservices (Maharashtra) said in a regulatory filing.
The BSE filing did not, however, specify the purpose for the fund raising.
The proposal is "subject to approval of members either by way of postal ballot or at the Extraordinary General Meeting", it added.
TTML said the fund raising will be done through issue of one or more types of instruments including redeemable preference shares to promoters, non-convertible debentures in one or more tranches, and/or inter corporate deposit/loans or Commercial Paper from the promoters and others.
As per the deal announced last week, over 4 crore customers of TTSL and TTML in 19 telecom circles or zones will be taken over by Airtel, India's largest telecom operator.
Airtel will also get access to 178.5 MHz of spectrum across 800, 1800, 2100 Mhz (3G, 4G) bands.
The deal will allow Bharti Airtel to close the gap with soon to be merged Idea-Vodafone combined entity.
While all of the Rs 31,000-crore debt will remain with the Tatas, Airtel will assume payment of close to 20 per cent of the Rs 9,000-10,000 crore deferred payments for the spectrum to the government. Tatas will pay the rest.
The deal is part of Tata Group's plan to find a solution for the troubled mobile business that was weighed down by huge debt, spectrum liability and monthly cash losses.
Tata Sons Chairman N Chandrasekaran had recently conceded that the group's mobile business, Tata Teleservices, was in a "really bad shape" and that a "tough call" would have to be taken on the business in this financial year.In April this year, the Delhi High Court had rejected the Reserve Bank of India's objections in the Tata-DoCoMo dispute, clearing the decks for the Tatas to pay over USD 1.1 billion to NTT Docomo in a matter pertaining to the Indian telecom joint venture.The Great Diwali Discount!
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