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