New Delhi: Japanese telecom firm NTT DoCoMo Inc on Friday said it will exit its loss-making mobile phone joint venture with Tata Group by selling its 26 percent stake.
Japan's largest wireless carrier by subscribers wants to sell the entire 26.5 percent stake in Tata Teleservices it had bought for 266.7 billion yen (USD 2.61 billion) in 2009 and 2011.
Tata Group is likely to buy the stake.
In a press statement, DoCoMo said “its board of directors resolved today to exercise option for the sale of the company's entire stake (124.9 crore shares, or about 26.5 percent stake) in Tata Teleservices Ltd (TTSL).”
Under the March 2009 agreement between DoCoMo, TTSL and Tata Sons Ltd - Tata Group's holding company, the Japanese firm “holds the right to require that its TTSL shares be acquired for 50 percent of the acquisition price, which amounts to 72.5 billion Indian rupees (or 125.4 billion yennotice1) or a fair market price, whichever is higher, in the event that TTSL fails to achieve certain specified performance targets.”
“In the event that TTSL fails to achieve these performance targets by the end of the fiscal year ended March 31, 2014, DOCOMO plans to exercise the above-mentioned right in or before June 2014,” the statement said.
DoCoMo expects to sell its TTSL shares in accordance with the agreement.