New Delhi: The government, one of the promoters of Tata Communications, has approved the company's move to bid for UK telecom firm Cable & Wireless Worldwide.
"Government has given the nod for Tata Communications to go ahead with the deal," sources at Department of Telecommunications said.
The Indian government held 26.12 per cent stake in Tata Communications at the end of 2011 December quarter, according to data on the BSE.
Sources said approval for Tata Communications to proceed with the deal only means that "the government does not has any objection".
"All guarantees or liability for this deal will be on Tata Communications and not on government," sources said. Tata Communications has plans to bid for CWW through a Special Purpose Vehicle (SPV) formed in The Netherlands.
The deadline for making acquisition bid for CWW has been extended till April 19. Tata Communications and UK-based Vodafone are looking at the possibility of bidding for the British entity.
According to reports, the Mumbai-based company has hired Morgan Stanley to work alongside Standard Chartered, its long-term adviser on the deal.
The reports suggest that TCL has amassed a $2 billion (1.26 billion pounds) war chest. State Bank of India and Australia and New Zealand Bank are believed to have also joined the consortium of lenders led by Standard Chartered.
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