Tata Sons Chairman N Chandrasekaran today conceded that the group's mobile business Tata Teleservices is in a “bad shape” weighed down by a huge debt and monthly cash losses, and emphasised that he would take a call about the business in this financial year.
In a candid admission, Chandrasekaran told CNBC-TV18 in an interview that a turnaround of Tata Teleservices was an extremely difficult task and that he is committed to finding a solution “one way or the other” very quickly.
The Tata Sons honcho did not directly answer whether the group would close down the business but said that a “tough call” will have to be taken on Tata Teleservices, an issue that tops his priority at present.
Also Read: Why Tata Group May Be Looking To Exit The Wireless Business
Tata Teleservices...is in a really bad shape. They have a huge debt. The footprint we have and the spectrum we have is very difficult...close to impossible for us to recover. So that is a company we are going to find a solution to very quickly.N Chandrasekaran, Chairman, Tata Sons
Asked how much time will he take to decide on the future of Tata Teleservices, Chandrasekaran said, “I am looking at all options and I will figure out a way this fiscal year.”
When pressed if it would mean closing down the business, he said: “It could mean anything. Basically, I don't want to put good money after bad money.”
Chandrasekaran's comments come amid reports about the company preparing an exit plan for majority of its 5,000 employees.
He said Tata Teleservices was burdened by Rs 31,000 crore debt in addition to spectrum liability and was incurring cash losses on a month-on-month basis. “It is not a business that I can easily turnaround,” he said adding that a turnaround would involve substantial investments to be infused which was “not prudent”.
I have a financial issue and I am committed to finding a solution one way or the other. I will have to take a tough call and I will.N Chandrasekaran, Chairman, Tata Sons
His plans for Tata Teleservices are part of a bigger strategy of the Tata group to simplify its structure and streamline companies, many of which are not performing. “Every single company is being looked at, if there is an opportunity to fix that, we fix that...if we can't fix it, then we have to take a call,” he said.
Also Read: Tata Teleservices Faces First Hurdle In Potential Wireless Business Shutdown
The salt-to-software conglomerate has over 100 companies with 29 publicly-listed entities, some of which include Tata Steel, TataMotors, Tata Consultancy Services, Tata Power, Tata Chemicals, Tata Global Beverages, Tata Teleservices, Titan, Tata Communications and Indian Hotels.
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