Tata Sons to split $1.18 billion NTT DoCoMo payment
Reports claim a truce between the Indian conglomerate and the Japanese operator could leave DoCoMo with $790 million to invest in India
Tata Sons is set to split a $1.18 billion owed to Japanese operator NTT DoCoMo, with two-thirds available to invest in India, according to reports.
The settlement follows an international arbitration court ruling that ordered the Indian company to pay NTT DoCoMo for breach of contract over a joint venture between the two. The court ruled Tata had neither found a buyer nor bought back NTT’s 26% stake in JV Tata Teleservices.
Reuters claims that both companies are expected to approach India’s centreal bank with a payment plan that will split the money into two parts. However, according to sources, DoCoMo will need to invest value of its share within in India – around $790 million – in the country.
"DoCoMo at least gets control of the money and can use it for investment in India," said the Reuters source.
DoCoMo decided to exit the JV in 2014, but Tata Sons failed to meet a clause that said, in the event of an exit, DoCoMo was entitled to either half its original investment or its fair value.
To meet the deal, Tata offered to buy back DoCoMo’s $1.1 billion stake, but this was blocked by India’s central bank due to rule changes around outside investment in India.