FIPB Nods Avaya's Buy in Tata Telecom

Avaya International has received the approval of Foreign Investment Promotion Board (FIPB) to pick up Tata Group's 25.1 percent stake in Tata Telecom Ltd
(TTL).

Avaya had proposed to acquire 25.1 percent of the paid up TTL capital from the Tatas for $18 million (Rs 810 million) at Rs 220 per share through its wholly owned subsidiary Avaya Mauritius.

The US-based telecom solutions provider, which already owns 25.5 percent in TTL, would now have to make an open offer for an additional 20 percent stake as per the SEBI takeover norms.

FIPB approved Avaya's proposal on the basis of the Department of Telecommunication's (DoT) rule that permits 100 percent foreign direct investment (FDI) in telecom equipment manufacturing, trading, and consultancy.

Tata Telecom would now be able to import and distribute telecom solutions, equipment and offer specialized after-sales services. However, it would not be allowed to do carry out domestic retail trading. Moreover, all its imports have to be in accordance with the EXIM policy.

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