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India's Tata Teleservices Gets Another Year to Find a Buyer

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Tata Teleservices has secured a short financial reprieve as its minority shareholder, Japan's NTT DoCoMo has apparently not decided to force a sale of its stake.

NTT DoCoMo has an option to force the company to buy back its 26% stake if the company did not meet certain performance levels, which it is thought to have widely missed.

However, the forced purchase of the stake could have crippled the already struggling company, and now the Economic Times is reporting that the Japanese company has agreed to defer its put option for another year.

The aim is to give the company time to find a buyer. Vodafone has been repeatedly rumoured over the past couple of months to be interested in buying Tata Telesystemss.

"The extension of the put option offers some leeway to the debt-laden company," an unnamed banking source told the newspaper.

Japan's NTT DoCoMo has a right of first refusal on the Tata Group's 59.45 percent stake in their mobile network joint venture, although it is now thought to be highly unlikely that it would exercise that if Vodafone came knocking.

If a deal were to go ahead, the merged Vodafone-TTSL would overtake Bharti Airtel to become the country's largest mobile network, with around 248 million subscribers.

On the web: Economic Times

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Tags: tata teleservices  ntt docomo  India