Tata Power to acquire 11.82 crore shares in Tata Teleservices

Tata Power is set to acquire 11.82 crore shares in Tata Teleservices following the approval by the Delhi High Court to the consent terms between Tata Sons and NTT Docomo with respect to the London Court of International Arbitration Award (LCIA) dated 22 June, 2016.
 
In terms of the inter-se agreement dated 25 March, 2009, Tata Power is to acquire 11,82,22,767 equity shares of Tata Teleservices (TTSL). As on date of the arbitration award which is 22 June, 2016, $1.17 billion was payable to Tata Power for the same, Tata Power said.
 
The final amount payable would be determined on the date of the payment to Docomo and would, therefore vary over the amount indicated above. Tata Power has remitted Rs 790 crore to Tata Sons on 9 August 2016 and this will be appropriately adjusted against the amount that will be governed by the terms and conditions similar to those stipulated by the Delhi High Court of 28 April, 2017, the company said.
 
As per the order, Tata Sons shall take necessary permissions from the Competition Commission of India and tax authorities to remit the amount in lieu of shares to be transferred to Tata Sons as per the consent terms, the company added.
 
Japan's NTT DOCOMO had acquired a 26.5% stake in Tata Teleservices for nearly Rs 12,700 crore (nearly $2.5 billion) in 2009. As per the agreement, DOCOMO was to be paid 50% of the acquisition price if it exits within 5 years. DOCOMO exercised on 7 July, 2014 its right (option) to request that a suitable buyer be found to purchase its TTSL shares for 50% of the acquired price, amounting to Rs 7250 crore (or 125.4 billion yen), or a fair market price, whichever is higher. But the Tatas offered DOCOMO only Rs 23.34 per share according to Reserve Bank guidelines following which the Japanese telecom major invoked arbitration.

The Japanese telecom major won the arbitration proceedings following which the Tatas deposited $1.17 billion with the Delhi High Court. Tata Sons has agreed to pay $1.18 billion in damages to NTT DOCOMO on 28 February, 2017 paving the way for the settlement between the two parties. The Delhi High Court, on 28 April, 2017 allowed Tata Sons to pay NTT Docomo the amount paving the way for the battle between the two companies to end.