Tata Sons dials banks to pay Rs 1,250 cr Tata Tele AGR dues and loans

March 31 is last date for paying 10% AGR dues as per Supreme Court order on telecom firms

Tata Sons, the parent company of Tata Teleservices, is in talks with banks to raise funds to pay latter’s dues to the banks and to the Indian government. The loss-making telecom company has to pay Rs 1,250 crore of dues to banks and another 10 per cent of outstandings to the government as AGR (adjusted gross revenue) as per the Supreme Court judgement before March end, said a banking source.

The DoT on March 16 last year had moved the Supreme Court seeking recovery of Rs 16,798 crore as the demand towards LF, Spectrum Usage Charges (“SUC”), interest, penalty and interest on penalty against Tata Group of companies and had showed an amount of Rs 12,601 crore as outstanding. This was after deducting an amount of Rs 4,197 crore, paid by Tata Tele following the Supreme Court judgement in 2019. 

In September last year, the SC directed all operators to pay 10 per cent of the total dues on or before March 31, 2021 and the balance in instalments commencing April 1, 2021 up to March 31, 2031 payable by March of every year.
 

A banker said TSL's commercial papers are also due in March in two tranches and with an additional payment to be made to the GoI, Tata Sons has initiated talks to raise funds and pay the telecom company’s dues on time.

An email sent to Tata Sons did not elicit any response till going to press. 

Tata Sons Private Limited, the holding company, owns 74.5 per cent stake in Tata Teleservices and has paid the latter’s entire bank debt despite the company making huge losses. 

Though Tata Teleservices and its listed subsidiary, Tata Tele Maharashtra have sought rectification of computational errors and erroneous disallowances in the amounts claimed by DoT in the Supreme Court, it has not received any respite so far. The matter is currently pending. 

Tata Teleservices has been a laggard among the Tata group companies with Tata Sons incurring huge loss in the wireless telephone operations. Though the group sold off the consumer mobile business to Bharti Airtel by 2019, it kept the entire liabilities with itself and repaid bank dues worth Rs 60,000 crore. This has helped the Tata group to retain its goodwill among the banks who are hit by multiple defaults by the telecom companies.

For the fiscal 2020, it reported revenue of Rs 1866 crore with a loss of Rs 13,226  crore on a standalone basis. The company’s entire net worth has eroded due to its accumulated losses (See Chart).