Tata Tele Q1 loss widens to Rs 127 cr

Tata Teleservices (Maharashtra) today posted a loss of Rs 127.45 crore for the first quarter ended June 30, as against a loss of Rs 82.38 crore in the year-ago period.
The company further said its accumulated losses as on June 30, has exceeded its paid up capital and reserves and Tata Sons, the holding company, has provided sponsor support undertaking to arrange or contribute equity of Rs 800 crore to the lenders of the company.
"The company's results for the quarter ended on the said date reflects a loss position and its current liabilities exceeded its current assets as at June 30, 2016," the company said in a BSE filing, while announcing standalone results.

The company further said it has not been able to satisfy the financial covenants stated in agreement with lenders of long term borrowings and lenders of External Commercial Borrowings which may result in loans aggregating Rs 475.87 crore being recalled by the lenders.
"Tata Sons Ltd has provided sponsor support undertaking to arrange/contribute equity of Rs 800 crore to the lenders of the company," it said.
Total income from operations (net) fell over 2 per cent to Rs 734.9 crore for the quarter ended June 30, from Rs 750.7 crore in the year ago period.

It further said the company's operational and cash flow projections for the current financial year envisages a renewal of spectrum. The company is in the process of negotiating roll forward or re-finance of short term borrowings.

"The company is therefore dependent on its ability to be able to successfully renew the spectrum and to meet the fund requirements to achieve its projections, failing which will have a significant impact on its ability to continue as a going concern," it said.
The company has received a support letter from Tata Sons indicating a fund infusion, directly or indirectly, for the purpose of spectrum renewal and related capital expenditure.
"To execute the funding support from Tata Sons, the Board of Directors of the company has approved (subject to shareholder's approval) issue of 0.1 per cent non-cumulative redeemable preference shares on preferential basis to Tata Teleservices Ltd," it added.

TTML operates mobile services in Maharashtra, including Mumbai circle and Goa.
The promoter of Tata Teleservices (TTSL), Tata Sons, was recently asked to pay Japan's largest mobile phone firm NTT DoCoMo USD 1.17 billion in compensation for breaching an agreement on India joint venture.
The London Court of International Arbitration ruled in favour of DoCoMo over price it was entitled to for exiting the Indian joint venture, the Japanese firm said in a statement.