The company has similar plots or buildings at Vikhroli, Ghatkopar, Chembur and Matunga in Mumbai and Marine Lines in Chennai. There are several such plots at prime locations in Delhi as well.
A company spokesperson declined to comment on the matter and email queries remained unanswered. However, real estate industry sources said the company had already initiated talks with potential buyers.
Talks are at preliminary stages and the company should be able to sell the assets by the end of the year, a real estate consultant told FE.
In fact, selling non-core assets has been on the companys agenda because it has limited options for raising funds with the government retaining a 26% stake.
It would not be the first time that Tata Communications would be selling land it got from VSNL. Last month, the company sold a land parcel and building in Chennai for R192.3 crore. The 1.5-acre plot was bought by VGN Group, a Chennai-based real estate group established by V Guruswamy Naidu in 1942.
However, former officials of VSNL are critical of Tata Communications move to sell off land parcels. They said the shareholders agreement between the government, which retains 26%, and the Tatas is defective in the sense that it neither bars the company from selling off such land parcels nor makes it mandatory to share the proceeds with the government.
The two government directors on Tata Communications board should be more vigilant in such matters, said an official.
When Tatas bought VSNL for Rs 1,439 crore, the company got various properties as operational assets. These were not land parcels per se, but staff quarters, offices or data centres. We are still using some of these for our business purposes. However, some of the others which we do not find useful we are looking to monetise them, said a senior official in Tata Communications.
Tata Communications had accumulated debt of over Rs 8,500 crore as on December 31, 2012. Its consolidated net loss widened to Rs 201 crore in the quarter ended December 31, 2012 against Rs 153 crore in the same period of 2011-2012. Tata Communications will announce its fourth quarter and annual results on May 28. However, the companys income from operations during October to December 2012 surged a sharp 23% to Rs 4,434 crore against Rs 3,604 crore in the same period last year.
A series of asset sales
Its not only land parcels which the Tatas have been selling since they acquired VSNL. There have been a number of joint ventures forged by VSNL from which the Tatas have exited. Within a year of taking over the PSU, Tata Communications sold assets worth nearly $226 million (Rs 1,243 crore today). These included sale of VSNLs holding in Inmarsat, the worlds largest commercial satellite communications services provider founded in 1979. The stake sale in the satellite communications company fetched $30.3 million (Rs 167 crore today), in 2003-2004. In 2004-2005, VSNL offloaded its 5.4% stake in Bermuda-based satellite major Intelsat for $169 million, or Rs 750 crore at that time (Rs 929.5 crore today). Founded in 1964, it offered telephony, corporate network, Internet and broadcast services worldwide through a network of 21 satellites to over 200 countries. VSNL sold its equity in New Skies satellite too in the same year for $27 million (Rs 148.5 crore today).