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DoCoMo looks to sell stake in Tata Tele

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Tokyo, April 24 (Reuters): Japan’s NTT DoCoMo Inc will unload its 26 per cent stake in its loss-making Indian mobile phone joint venture, Tata Teleservices Ltd, and withdraw from the country, Japan’s Nikkei newspaper reported.

The joint venture, operating under the Tata DoCoMo brand, had 63 million mobile customers at the end of March, ranking No.7 in the crowded Indian market.

The Japanese mobile giant is in talks to unload the stake to Tata Group, the Nikkei said in an unsourced report.

DoCoMo apparently booked related impairment charges of about 50 billion yen ($489 million) in the year ended March 31, the newspaper reported.

DoCoMo bought its stake in the joint venture for $2.7 billion in 2009.

Tata Teleservices Ltd was not immediately available for comment.

DoCoMo in 2012 had skipped an option to raise its stake in Tata Teleservices up to 35 per cent, citing regulatory issues. This year, DoCoMo did not exercise another call option to become a 49 per cent shareholder in Tata Tele.

Call option gives the investor the right but not the obligation to buy shares at a preset price.

Alternatively, the Japanese conglomerate has the option to sell its 26 per cent stake back to Tata Teleservices at a negotiated price if it does not exercise these options and if the Indian operator is unable to reach certain performance-related milestones, including certain targets related to revenue, profit and subscriber base in a specified time.

 
 
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