In a key move, the Ministry of Corporate Affairs (MCA) has given its approval to demerge surplus land held by Tata Communications (erstwhile Videsh Sanchar Nigam Limited) into a new entity. The approval has brought the long standing issue between Tata Communications and the Centre to a close.
The Tata Group had acquired stake in VSNL in 2002 as part of the Centre’s disinvestment programme. Later in 2008, VSNL was fully acquired by the Tatas and renamed Tata Communications. While the telecom business under VSNL was transferred to Tata Communications, there was a dispute related to the surplus land held by VSNL.
Post the, MCA’s approval, Tata Communications can demerge approximately 773.13 acres of surplus land into a new entity called Hemisphere Properties India Limited (HPIL).
Once the scheme is implemented, HPIL will provide shares to all the shareholders of Tata Communications in the ratio 1:1, mirroring the shareholding of Tata Communications.