Tata Communications sells SA unit Neotel

Tata Communications has agreed to sell its South African unit Neotel to Vodacom for $676 million (Rs 3,959 crore). The Neotel sale will help Tata Communications cut down its over Rs 11,000-crore debt to some extent, according to a report.

“The deal is in line with our financial objectives while paving the way for Neotel to improve its value proposition in the South African market, said Vinod Kumar, MD & CEO, Tata Communications.

“We are encouraged at the progress made to date and will focus now on ensuring compliance with the regulatory approvals processes and the engagement with the competition authorities,” said Sunil Joshi, MD & CEO of Neotel.

Eight month ago, South African mobile operator Vodacom Group and Neotel announced that they have entered into exclusive discussions regarding a potential acquisition of 100 percent of the shares of Neotel.

Neotel is South Africa’s secondbiggest fixed-line phone operator, with 68.5 per cent ownership by Tata Group of India – through VSNL and Tata Africa Holdings Pty.