Govt to sell stake in Tata Comm

The Government of India will sell its entire stake in Tata Communications through an offer for sale and the rest to Tata Son's investment arm Panatone Finvest.

In a regulatory filing on Friday (12 March 2021), Tata Communications announced the signing of amendment agreement between Government of India, Panatone Finvest, Tata Sons and the company for sale of the entire shareholding in the company by the Government of India.

Currently, the government holds 26.12% stake in Tata Communications, Panatone Finvest 34.8% and Tata Sons 14.07%, respectively.

As an initial step, the government will sell up to 4,59,46,885 equity shares, forming 16.12% equity shareholding of the company through an offer for sale (OFS) through the stock exchange.

 

Immediately after the OFS, the government shall sell the remaining equity shares held by it in the company to Panatone. The price of equity shares to be sold to Panatone will be arrived at by dividing the aggregate of the product of the number of equity shares sold (under the OFS) and the corresponding price at which such equity share is sold, by the total number of equity shares sold (under the OFS).

Upon completion of aforesaid transactions, the government will cease to be a shareholder of the company.

In view of the above, the government, Panatone, Tata Sons and the company entered into an amendment agreement with regard to amending the shareholders' agreement dated 13 February 2002 which was entered into at the time of disinvestment by the government in 2002 between the Government and Panatone and to record the terms and conditions for transfer of the agreed percentage of shares of the company held by the government to Panatone.

Public sector VSNL was privatised in the year 2002 by disinvesting 25% shareholding along with transfer of management control to the strategic partner, Panatone Finvest. Following the strategic disinvestment, the name of the company was changed to Tata Communications.

Shares of Tata Communications fell 0.21% to close at Rs 1289.75 Friday.

Tata Communications is an Indian telecommunications company. On a consolidated basis, the company posted 428.1% jump in net profit to Rs 309.15 crore on a 0.1% decline in net sales to Rs 4,222.83 crore in Q3 FY21 over Q3 FY20.

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