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Lenders may recall loans of Rs 1,911 cr, says Tata Tele

Press Trust of India  |  New Delhi 

Lenders of Tata Teleservices (Maharashtra) Ltd (TTML) may recall loans of Rs 1,911 crore as the company has not been able to satisfy them with its financial performance, as per a company note.

The company in a filing to today reported a loss of Rs 506 crore for the quarter ended on June 30, 2017, against that of Rs 127.45 crore in the same period of last year mainly due to dip in revenues and over two-fold jump in cost.

"The Company has not been able to satisfy the financial covenants stated in agreements with lenders of long term borrowings and lenders of external commercial borrowings which may result in loans aggregating to Rs 191,111 lakh being recalled by the lenders," TTML said in the notes.

The total accumulated loss of Tata Teleservices as of June 30, 2017 have exceeded its paid up capital (Rs 1,954.93 crore) and reserves, the company said in note.

The cost of the debt ridden company increased to Rs 388.17 crore during the reported quarter from Rs 179.1 crore it recorded a year ago.

The company was reeling under debt of Rs 15,535 crore at the end of March 31, 2017.

TTML has received backing of Tata Sons to pay back loans in case lenders recall the dues.

The company has been struggling in Indian telecom market in the midst of high intensity tariff war.

Its peer Reliance Communications has been given time till December 2017 to service debt.

Many telecom operators are facing huge debt in the sector after they had to renew their right to use spectrum and as well as buy additional airwaves through auction.

While spectrum prices have been rising, telecom operators are facing huge cut in margins due to intense competition in the sector.

In a bid to give relief to the sector reeling under massive debt and profitability issues, the government has set up an inter-ministerial group which is considering giving telecom companies more time to pay for the spectrum they bought.

The IMG is learnt to be favourably considering relaxing the period of deferred spectrum payment to 16 years, to improve the cash flow of telecom companies.

(This story has not been edited by Business Standard staff and is auto-generated from a syndicated feed.)

First Published: Tue, August 08 2017. 21:57 IST