Economy

End of feud as DoCoMo gets $1.3bn from Tatas

Japan's NTT DoCoMo has finally completed its exit from Indian joint venture Tata Teleservices, following the acquisition of Tata Teleservices' consumer mobile business by Bharti Airtel.

"Docomo has ceased to hold any shares in TTSL (Tata Teleservices) and consequently the shareholders agreement dated March 25, 2009 entered between TTSL, Docomo and Tata Sons Limited, including all rights of Docomo in relation to TTSL and TTML (Tata Teleservices Maharashtra) contained therein, automatically stands terminated", Tata Teleservices Maharashtra said in a BSE filing Wednesday.

NTT DoCoMo has received the arbitration award of almost 145 billion yen ($1.3 billion) from Tata Sons with regard to its 26% stake in Tata Teleservices, the Japanese major said on Tuesday. The $1.3-billion award includes DoCoMo's exit price from Tata Teleservices, interest and other costs.

The Japanese firm then dragged the Tatas to worldwide arbitration where it won the $1.18 billion award. If it failed to hit these, Tata would be obliged to find a buyer for DoCoMo's shares at market price.

NTT DoCoMo said it has now received the money from the Indian company, which it was awarded by an worldwide arbitration court a year ago, meaning it has now exited its 26.5% stake in TTSL. The company, then under the chairmanship of Cyrus Mistry, offered Rs. 23.34 per share in line with the RBI guidelines which state that an worldwide firm can only exit its investment at a valuation "not exceeding that arrived at on the basis of return on equity". But the RBI again objected to the transaction, prompting DoCoMo to file a case with the Delhi High Court.

Resolving the telecom business was the top priority for the Tata Group after Chandrasekaran took charge in February as within a week of his appointment, the Tata Sons board made a decision to withdraw its objections in the Delhi High Court to the enforcement of the award in India.



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