The Tata Group is planning to invest about Rs 40 billion in Tata Teleservices Limited (TTSL), with banks declining to renew the loans extended to the operator until its annual losses were funded.
The investment is likely to be through a convertible loan instrument. The Tata Group plans to invest Rs 25 billion immediately and another Rs 15 billion over next few months. However, the funds extended by the Tata Group would not be used by the operator to fund the upcoming spectrum auction.
Since Japan’s NTT DOCOMO and Temasek which hold 26 per cent and 7 per cent stake respectively in TTSL are not going to invest in the company, the Tata Group is likely to opt for a redeemable debt instrument that can be converted into shares in case the Japanese firm decides to exit TTSL.
