NTT DoCoMo has filed a request for arbitration regarding the planned sale of its 26.5% stake in Indian mobile operator Tata Teleservices.
The Japanese telco on Monday announced that it had made the filing with the London Court of International Arbitration two days earlier.
Essentially, DoCoMo is keen to ensure that it can extract the price it is entitled to for its shares in Tata Teleservices (TTSL), as per its shareholder agreement with partner Tata Sons, a holding company for the Tata group. The agreement stipulates that DoCoMo should receive 50% of the sum it paid for the 26.5% stake or a fair market price, whichever is higher.
DoCoMo acquired its TTSL stake in March 2009 for 250 billion yen. Based on a March 2014 exchange rate, DoCoMo is looking for at least 72.5 billion rupees for the stake, or in the region of €950 million.
NTT DoCoMo announced that it planned to exit TTSL, which operates as Tata DoCoMo, in April last year and exercised its option to do so in July, putting the onus on Tata to find a buyer.
Reuters quoted a DoCoMo spokesperson as saying that Tata had failed to do so within a specified 90-day period, although the company did not mention such a deadline in its filing.
"Pursuant to the shareholders agreement, DoCoMo submitted its request for arbitration to ensure that its right be exercised after Tata Sons had failed to fulfil its obligation, despit e DoCoMo’s repeated negotiations with Tata Sons regarding the sale of its entire stake in TTSL," DoCoMo’s filing stated.
There are reports of a possible buyer waiting in the wings though.
Telenor is in talks over a possible acquisition of Tata Teleservices, India’s Business Line reported last week, citing unnamed sources.
The paper’s sources said one outcome could see Telenor acquire DoCoMo’s stake in TTSL and then merge Tata DoCoMo with its Indian operation Uninor.
Tata itself could also be keen to sell out of the mobile operator, with reports at various times last year claiming that the company is keen to get out of the telecoms business altogether.
Based on the most recent figures published by the Telecom Regulatory Authority of India (TRAI), a combined Tata DoCoMo and Uninor would have a market share of 11.45%, making it India’s fifth largest mobile operator.
Telenor took sole control of Uninor in October, following the Indian government’s decision to remove the foreign direct investment cap in the telecoms space.
