Indian conglomerate Tata Group is reportedly considering winding down its struggling mobile operation Tata Teleservices after failing to find a potential buyer.
The Economic Times has reported, citing unnamed sources, that Tata Group chairman N Chandrasekaran is evaluating suspending its telecoms operations to tackle the operator's mounting debt.
If the operations are wound down, Tata Group may need to take financial losses due to Tata Teleservices' total debt of around 340 billion rupees ($5.3 billion), and lenders may need to take a haircut on the value of their debt owed, according to the report.
But according to the report, a closure can only happen once these lenders agree to a loan recast program
Tata Teleservices still has around 45 million customers for a 4% share of the total market. But the operator has been seeking a sale or merger ever since joint venture partner NTT DoCoMo decided to pull out of its 26% shareholding, exercising its option to require Tata Group to buy back DoCoMo's stake in the venture
The company has held discussions with Airtel, Vodafone and even newcomer and Reliance Jio, but no deal has eventuated, leaving dissolving the company the most viable option, according to the Economic Times' sources.
A nominee of Tata Sons' largest shareholder has also recently suggested that Tata Teleservices file for bankruptcy.