Tata Communication to sell its 67 per cent stake in Neotel to Vodacom SA for ZAR 7 billion

Tata Communications is going to sell off its South-Africa-based telecom unit Neotel to Vodafone-owned Vodacom SA for ZAR 7 billion.

Under the terms of agreement, Tata Communications will sell its 67 per cent stake in Neotel for an all-cash deal. At present, Neotel Pty has about 152,000 customers and 1,000 employees. With the acquisition of Neotel, Vodacom SA will get access to 15,000 km of former?s fibre optic cable network and spectrum in the 1.8 GHz, 800 MHz and 3.5 GHz bands.

The deal is crucial for the Tata Group-owned undersea cable company which is looking to raise money to pare accumulated net debt of $1.4 billion.

Commenting on the deal, Vinod Kumar, managing director and chief executive officer, Tata Communications says, ?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.?

Standard Chartered was the advisor to Tata Communications for the deal.