The Reserve Bank of India (RBI) has given its backing to Tata group buying NTT DoCoMo out of the pair’s Indian mobile joint venture at the price stipulated in their shareholder agreement, it emerged this week.
Japan’s DoCoMo announced its plan to exercise an option to exit Tata DoCoMo last year and is looking to receive 72.5 billion rupees (€950 million) for its 26.5% stake, as per the terms of the JV pact.
The agreement stipulates that DoCoMo should receive half what it paid for the stake or a fair market value, whichever is higher.
However, according to India’s Business Standard, at Tata’s request, PriceWaterhouseCoopers (PwC) assessed the value of the stake, putting it at around 23.34 rupees per share, or 60% lower than the INR58 per share DoCoMo is seeking.
Nonetheless, the RBI said it is "inclined to accept" Tata’s proposal to buy back the stake at the higher price, the paper said, adding that it has now passed the matter to the investment division of India’s Department of Economic Affairs for review.
Last week NTT DoCoMo announced it had filed a request for arbitration in the matter with the London Court of International Arbitration in order to ensure it can exit the company at the previously agreed price.
It accused Tata of failing to fulfil its obligation with regard to the sale of the stake.
While Tata could buy back the stake itself, there have also been rumours that Norway’s Telenor is interested. With Tata thought to be considering exiting the telecoms space, Telenor could take control of Tata DoCoMo and subsequently merge it with its own Indian mobile unit, which operates under the Uninor brand.
