Tata Sons to sell TCS stake worth $1.25 billion to pay debt
Tata Sons will sell 28.27 million shares, or 1.48% stake, in TCS at Rs2,872 to Rs2,925 apiece, according to the terms of the transaction
Hong Kong/Mumbai: Tata Sons Ltd, India’s biggest business group, plans to sell $1.25 billion of its stake in Tata Consultancy Services (TCS), according to terms of the transaction.
Tata Sons will sell 28.27 million shares of Asia’s largest software developer, or about 1.48% stake, according to the terms. The company plans to sell the shares at between Rs2,872 to Rs2,925 a share, the terms show. Citigroup Inc. and Morgan Stanley are the bankers to the sale. Tata Consultancy, which is 73.5% owned by its parent, rose 0.57% to Rs3051.85 on BSE earlier on Monday.
Tata Sons will use the proceeds to pay creditors of its wireless division, according to a person with knowledge of the matter. The company will also use the funds to raise its stake in some of its unit in a bid to reduce cross holdings, the person said asking not to be identified as the matter is private. Tata sold Tata Teleservices Ltd’s mobile-phone operations to Bharti Airtel Ltd last year and pledged to pay the unit’s obligations.
The holding company is also seeking an offshore syndicated loan, as it seeks to pay down expensive debt at telecommunications unit, people familiar with the matter said last week. Tata Sons has mandated lenders for a $1.5 billion six-year loan. Tata Sons plans to use the proceeds to repay debt of units Tata Teleservices and Tata Teleservices Maharashtra, a person said then. Bloomberg
Editor's Picks »
- India’s renewable energy sector hits a milestone but loses speed
- All eyes now on share swap ratio in this mega bank merger
- Jet Privilege can actually get higher valuation than Jet Airways
- Profitability of cement firms to take a hit due to weak prices, high costs
- Pidilite’s shares hold their ground despite weak rupee and rising crude