Avaya gets nod to pick up 25% in Tata Telecom

Avaya International, the US-based communications service provider, is all set to pick up 25.1 per cent stake in Tata Telecom (TTL) following an approval from the Foreign Investment Promotion Board (FIPB).

Avaya had earlier proposed to acquire 35,70,082 equity shares, translating into 25. 1 per cent of the paid-up capital of TTL, through its direct subsidiary Avaya Mauritius.

FIPB approved Avaya's proposal on the basis of the Department of Telecommunication's (DoT)'s contention that allowed 100 per cent foreign direct investment (FDI) in telecom equipment manufacturing, trading and consultancy.

The US firm needs to make an open offer for 20 per cent outstanding shares of TTL as required under Sebi regulations.

After this approval, the Tata group company will be able to import and distribute telecom solutions, equipment and offer specialised after-sales services.

The company, however, would not be allowed to do any domestic retail trading. All its imports have to be in accordance with the exim policy.

According to industry sources, Avaya Mauritius has sought further approval to acquire another 24.4 per cent equity in TTL, that will take its total stake to 49.5 per cent.

FIPB has recommended the proposal subject to the condition that it satisfies the pricing guidelines of the Securities and Exchange Board of India and the Reserve Bank of India.