Tata Communications has sold its South African telecom arm Neotel to Liquid Telecom and Royal Bafokeng Holdings for an enterprise value of 6.55 billion rand ($428 million or Rs. 2,904 crore). Tata Communications holds a 68 per cent stake in the company, while Nexus Connexion and Communitel are the other investors. After the deal, Bafokeng Holdings will hold a 30 per cent stake in Neotel, while Liquid Telecom, a subsidiary of South Africa’s Econet Wireless Global, has agreed to buy the remainder of the Tata company’s holding.
The move is part of Tata Communications’ game plan to reduce its debt of nearly $1.5 billion and fits in with Tata Sons Chairman Cyrus Mistry’s strategy to exit non-core businesses. In June, Tata Communications sold its 74 per cent stake in a data centre business to Singapore Technologies Telemedia, in a deal estimated to be around $650 million.