Tata Communications surges after Econet agrees to buy arm Neotel

The stock surged 8% to Rs 485, trading nears to its 52-week high of RS 490 on the BSE.

Tata Communications has surged 8% to Rs 485 on the BSE after Liquid Telecom, a pan-African telecom group, majority owned by Econet Wireless Global, has entered into an agreement to acquire South African communications network operator Neotel. Neotel is a subsidiary of the Company.

The stock is currently trading nears to its 52-week high of Rs 490 touched on July 24, 2015 during in intra-day trade.

The shareholders of Neotel – Tata Communications of India and minority shareholders led by Nexus Connexion – have agreed for Liquid Telecom to acquire Neotel for ZAR6.55 billion, Tata Communications said in a release.

Liquid Telecom is partnering with RBH, a South African empowerment investment group, which has committed to take a 30% equity stake in Neotel, it added.

The transaction is subject to approval by South African regulatory authorities and is expected to be completed later this financial year.

At 09:33 AM, the stock was up 7% at Rs 481 on the BSE, as compared to 0.17% rise in the S&P BSE Sensex. A combined 994,499 shares changed hands so far against an average sub 400,000 shares that were traded daily in past two weeks on the BSE and NSE.