Tata Communications is in advanced talks with Singapore Technologies Telemedia for the sale of its data centre business. The deal is reportedly valued at around $100 million. Tata Communications could retain a minority stake in the business.
Tata Communications is selling the data centre business as the unit requires huge capital and the returns on investment have a long payback period. Moreover, the deal is expected to reduce the debt of the company which stands at around $1.4 billion at present.
The Indian government also holds a 26 per cent in the company?s data centre business. A significant number of the company’s data centres are based in the country. These units generated revenue of Rs 4.36 billion and had an operating profit of 27 per cent in 2014-15.
