Tata Comm to Get .₹ 2,000 cr from Sale of Neo­tel

The Economic Times - - Companies: Pursuit Of Profit - Our Bureau

Mumbai: Tata Com­mu­ni­ca­tions said on Fri­day that it has com­pleted the sale of South African sub­sidiary Neo­tel to Liq­uid Tele­com at an en­ter­prise value of 6.55 bil­lion rands (.`3,287 crore).

For its around 68% hold­ing in Neo­tel, Tata Com­mu­ni­ca­tions’ share will be more than .₹ 2,000 crore, which will help the In­dian com­pany pare its net debt of over $1 bil­lion (.`6,700 crore). Nexus Con­nex­ion, the mi­nor­ity share­holder in Neo­tel, also sold its stake.

“(The deal) clearly makes sound strate­gic sense for Tata Com­mu­ni­ca­tions and our share­hold­ers. Also, through­out the jour­ney of this trans­ac­tion, we have ac­tively been seek­ing the best pos­si­ble out­come for Neo­tel’s cus­tomers and em­ploy­ees,” Tata Com­mu­ni­ca­tions MD Vinod Ku­mar said in a state­ment.

Liq­uid Tele­com, the Pan-African tele­coms group ma­jor­ity-owned by Econet Wire­less Global, had en­tered into an agree­ment with Tata Com­mu­ni­ca­tions and Nexus Con­nex­ion to ac­quire Neo­tel in June 2016.

The clo­sure of the trans­ac­tion fol­lows the coun­try’s Com­pe­ti­tion Com­mis­sion and In­de­pen­dent Com­mu­ni­ca­tions Author­ity of South Africa ap­prov­ing the deal in Oc­to­ber and De­cem­ber 2016, re­spec­tively.

The trans­ac­tion “has cre­ated the largest pan-African broad­band net­work and B2B tele­com provider, en­abling African com­pa­nies to be able to con­nect with each other and in­ter­na­tion­ally on a sin­gle fi­bre net­work”, the state­ment said.

A pre­vi­ously pro­posed deal by Tata Comm to sell Neo­tel to Vo­da­com SA had fallen through early last year due to reg­u­la­tory com­plex­i­ties.

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