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Tata Comm to sell S African arm Neotel for ₹2,900 crore
MUMBAI: Tata Communications will sell its South African telecom unit Neotel to Liquid Telecom and Royal Bafokeng Holdings for $429 million (₹2,900 crore), in a move
MUMBAI: Tata Communications will sell its South African telecom unit Neotel to Liquid Telecom and Royal Bafokeng Holdings for $429 million (₹2,900 crore), in a move to cut debt.
Tata Comm holds 67% in Neotel. Minority shareholders led by Nexus Connection are also selling their stake in the telco.
The deal will create the largest pan-African broadband network, spanning 40,000 km of fibre networks in 12 countries, from South Africa to Kenya.
“Liquid Telecom is partnering with Royal Bafokeng Holdings, a South African investment group, which has committed to take a 30% stake in Neotel,” the companies said in a statement.
Liquid Telecom, a unit of Mauritius-based Econet Global, said it would use the single fibre network to launch products and services for African businesses. “We will also be increasing investments into Neotel,” Liquid Telecom CEO Nic Rudnick said.
The transaction, expected to be completed later this year, is subject to regulatory approvals.
“Liquid Telecom is the right partner for the next phase of Neotel’s evolution,” said Vinod Kumar, MD and CEO, Tata Comm.
In 2014, Tata Comm had entered into an agreement to sell Neotel to Vodacom, a Vodafone Group Plc unit. However, the deal fell apart due to complexities in regulatory approvals.
Tata Comm currently has a net debt of ₹10,000 crore. In May, the company agreed to sell 74% stake in its data centre business to a unit of Singapore’s Temasek Holdings for around₹4,200 crore.
Selling assets is part of a wider group strategy under chairman Cyrus Mistry. Tata Steel has put its UK business up for sale. The group’s luxury hotels chain, Indian Hotels, recently sold its Taj Boston hotel, while retaining management control.
