Tata Communications surges after Neotel sale to Liquid Telecom

Tata Communications on Tuesday announced its agreement with Liquid Telecom to acquire its subsidiary Neotel for South African Rand 6.55 billion (Rs 2,904 crore).

In a BSE filing Tata Communications said that a privately-owned pan-Africa telecom group majority owned by Econet Wireless Global, has entered into an agreement as the shareholders of Neotel-Tata Communications of India and minority shareholders led by Nexus Connexion have agreed for Liquid Telecom to acquire Neotel for ZAR 6.55 billion."

"Liquid Telecom is partnering with Royal Bafokeng Holdings (RBH), a South African empowerment investment group, which has committed to take a 30 per cent equity stake in Neotel," it added.

Tata Communications added that the transaction is transformative and will create the largest pan-Africa broadband network and B2B telecom provider.

It also added that businesses across Africa will be able to access Liquid Africa's 24,000 km of cross border, metro and access fibre networks.

"Liquid Telecom is the right partner for the next phase of Neotel's evolution. Convergence of technologies and services will be the key driver of growth across the globe and this transaction will encourage inclusion and support the growth aspirations of the African continent," added Tata Communications MD and CEO Vinod Kumar.

Tata Communications, which owns over 68 per cent stake in South Africa's largest fixed line telephone service provider Neotel, in March this year sold a majority stake in subsidiary Neotel to Vodacom, South Africa, had lapsed due to regulatory complexities and non-fulfillment of certain conditions.

The company on December 10 last year had said Neotel and Vodafone's South African subsidiary, Vodacom, have concluded a modified transaction and the transaction documentation relating to the restructured deal was submitted to the Competition Tribunal.

The deal was originally signed in May 2014 wherein Vodacom had reached an agreement to buy Neotel, controlled by Tata Communications, for 7 billion Rand (about Rs 3,200 crore).