The Tata Group has informed the Department of Telecommunications (DoT) that selling the surplus land held by Tata Communications (the erstwhile Videsh Sanchar Nigam Limited) can potentially net Rs 61.56 billion in revenues.
In a written communication to DoT, the Tata Group has said that this estimated value is based on the prevailing government rates. The Tata Group has also said that the stamp duty and registration-related costs of demerging this land into a separate company is about Rs 4.27 billion. The letter adds that the company spends about Rs 30 million per annum as running costs for maintaining this land.
In 2003, DoT had estimated the value of this surplus land at around Rs 1.51 billion and the demerger?s stamp duty costs at around Rs 151.2 million. VSNL was acquired by a subsidiary of Tata Sons, the holding company of the Tata Group, in 2002.
However, the 770 acres of land spread over five locations in Delhi, Kolkata, Chennai and Pune, was not part of the deal. While DoT planned to hive off the land into a separate company with the same shareholding pattern as VSNL, before the sale, the Tata Group had objected to the demerger on grounds that the company would have to pay the cost-capital gains tax and stamp duty.
Prior to this, the Tata Group had told DoT that it did not intend to hold on to the surplus land and the delays in taking a decision on this issue was impacting the company, as it has been unable to raise equity.
It is believed that the issue has been put before the Telecom Commission.
