anilrgowda

Tata Communication Land Demerger: 773 acres of Tata Communications surplus land to be hived off through auction: DoT srcs

DoT Sources confirm that it will circulate draft cabinet note for auction of surplus land in 15 days . DoT to appoint agency post cabinet nod for open auction of surplus land. Cabinet Approval for auction likely in 3 months.

773 acres of Tata Communications surplus land to be hived off through auction. Tatas not to get any proceeds from land auction however, it can participate in bid.50% of proceeds to go to govt, 29% to current non-promoter shareholders. Tata Communication surplus land valued at rs 6,000-8,000 crore by market analysts.

Sandeep Gurumurthy of CNBC-TV18: This is been a good news for Tata Communication share holders, who been waiting for this for while now. CNBC-TV18 learnt from a top source in the DOT, that they will be circulating a draft cabinet note over the next 15 days for the auction of the surplus and 773 acres of prime land and understand that the entire process of seeking cabinet approval could be taking about 3 months from now after which an agency will be set up which will conduct the open auction. The exact mandate of the agency whether the entire auction of the land will be done in one go or not, all of that is not known yet. 773 acres of surplus and the proceeds of this will not go to the promoter. 50% of the proceed will to go the government but crucial existing 29% will go to non promoter share holders and 20% of share holders who rendered their shares at the time of their investment. This land is currently valued at Rs 6,000 crore to Rs 8,000 crore and there has been no official valuation of the land and yet by Tata Communication or by the government but this is what the market analysts have been doing since the last couple of years. Reports suggests that this land is valued at that price. So, the entire process, post cabinet approval, 3 months for that, post that, once the agency is set up for the land to get auctioned, it could take anywhere between 6-9 months from now but there is at least a certainty that this will happen hopefully before the end of this calendar year.

This thing is being hanging like for ever but now finally this seems of getting off the ground. The reason it was hanging was due to the approval from the telecom commission which is the apex decision making body within the duty hadn’t come by. That came in 2 months later and post that now the DOT has had consulting with various ministry including the law ministry and finance ministry and now they are in a position to at least circulate a cabinet growth some thing that they have never done before. So, now they are going to circular a draft cabinet note seeking the approval of the cabinet to conduct the auction. This note and again a top source in the DOT told that it is going to be circulated in 15 days. So, there is at least a certainty to it and it has been hanging by for a very long time which is why share holders would be wary. But now, there is a time line to it and there is a certainty to it and one would reckon the government also in some interest would like to get it done fast because 50% of the proceeds go to the government.