Avaya buys out Tatas from Tata Telecom

Open offer soon at Rs 220 a share

The Tata group announced that was is selling a 25.1% stake in Tata Telecom to its joint venture partner, the New Jersey-based Avaya Inc, for approximately $18 million (around Rs 80 crore) in cash, or Rs 220 a share.

"We are exiting Tata Telecom," a senior Tata group executive said. According to a joint press release issued by the Tata Group and Avaya here today, Avaya will make an open offer for a minimum of 20 per cent stake in Tata Telecom at the same price.

Avaya currently has a 25.5 per cent stake in Tata Telecom. The 25.1 per cent stake it is acquiring from six Tata companies "" Tata Industries, Tata Sons, Tata Power, Tata Chemicals, Niskalp Investments and Trading Company and Tata Investment Corporation "" will take its stake to 50.60 per cent.

After the open offer, its stake will rise to over 70 per cent. The public and others hold 49.40 per cent of the company's equity.

K A Chaukar, managing director of Tata Industries, said the Tata group's decision was in line with the overall strategy to focus on the telecom services business.

Nuru Mehta, vice-chairman of Tata Telecom and managing director and vice-president of Avaya India, said that over the last seven years, the Tatas and Avaya had brought state-of-the-art telecom communications solutions to India through Tata Telecom.

Avaya is a Fortune 500 company and a leading global provider of communications networks and services. Tata Telecom is a communication solutions provider.

The agreement is expected to come into force by September 30, 2004, and is subject to regulatory approvals.