Tata Sons To Sell Tata Consultancy Stake Worth $1.25 Billion To Repay Debt

| March 13 , 2018 , 12:05 IST

Tata Sons Ltd, the holding company for India's biggest business group is selling around 1.48 percent of its stake in software services provider Tata Consultancy Ltd worth $1.25 billion, reportedly to pay-off debts.

According to Bloomberg, Tata Sons was offering 28.27 million shares of Asia’s largest software developer after the market closed on Monday, planning to sell the shares between Rs 2,872 to Rs 2,925 a share.

However, the shares of Tata Consultancy fell by as much as 5.9 percent in Tuesday trading, down by 4.7 percent, in the biggest one-day decline in more than a year.

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The proceeds of the share sales will reportedly be used by Tata Sons to pay creditors of its wireless division. Last year, Tata had sold off the Tata Teleservices Ltd.’s mobile-phone operations to Bharti Airtel Ltd. to raise funds for creditors as well.

Since last year, the conglomerate has been planning to increase its ownership in its largest businesses including Tata Chemicals Ltd. and Tata Steel Ltd. While last year Tata Songs boosted its stake in Tata Motors Ltd, the owner of Jaguar Land Rover, it is also planning to buy 6.6 percent additional stakes in Indian Hotels Co. that was held by Tata Trusts.

The offering for the Tata Consultancy stocks are to be arranged by Citigroup Inc. and Morgan Stanley with a price range representing a 4.2 percent to 5.9 percent discount to its last closing.

In addition, the holding company is seeking a $1.5 billion offshore syndicated loan, to pay down expensive debt at its telecommunications unit.

Tata Sons is reportedly planning to use the proceeds to pay debts of units Tata Teleservices and Tata Teleservices Maharashtra.