NTT could increase TTSL stake based on cellco’s performance

29 Jan 2010

Japan’s NTT DoCoMo could boost its stake in Indian mobile network operator Tata Teleservices (TTSL) should the latter fail to meet certain performance benchmarks, the Economic Times reports. According to the shareholding agreement between the two it is understood that NTT, which currently holds a 26% stake in TTSL, has the right to up its holding to 35% by March 2012 by infusing fresh equity, while it could further raise this to 51% by March 2015 by subscribing to new shares at fair market value plus a 30% control premium. However, it has been revealed that these options will only be triggered if TTSL fails to meet a number of aggressive performance targets; these include reaching a minimum operating profit margin of 15% and rolling out 20,000 GSM towers by March 2012, while by March 2015 TTSL has to increase the number of GSM towers to 26,000 and further hike its EBIDTA margin to 25%.

India, NTT DOCOMO, Tata Teleservices (TTSL, incl. TTML)