Tata Comm to sell 74% stake in data centre biz to ST Telemedia

Tata Communications Ltd today announced the sale of 74 per cent stake in its data centre business in India and Singapore to ST Telemedia for about Rs 3,150 crore to pare debt and fund expansion.
Tata Communications, which provides telecom and data services infrastructure through its network of undersea and terrestrial cables, will continue to hold remaining 26 per cent stake in the 14 data centres in India and three Singapore facilities.
The deal with ST Telemedia Global Data Centres (STT GDC), a wholly owned subsidiary of Singapore Technologies Telemedia (ST Telemedia), will close in the coming weeks and both parties will work in partnership to ensure service continuity for customers and employee engagement, Tata Communication said in a statement.

Tata Communications has been looking at selling non-core assets to cut its Rs 9,595-crore debt.
It has 45 data centres globally and the company as of now is not considering selling stakes in data centres in other locations.
The company is also scouting for a buyer for its South African network operator Neotel Pty.

"STT GDC will acquire 74 per cent majority stake in Tata Communications' data centre business in India and Singapore. Tata Communications will remain a significant shareholder, holding the remaining 26 per cent stake in the businesses," the statement said.
In 2014, the Indian data centre business of Tata Communications was transferred to its wholly-owned subsidiary Tata Communications Data Centres Private Ltd (TCDC) through a High Court approved process.

TCDC owns and operates a total of fourteen data centres including facilities in Delhi, Mumbai, Bengaluru, Chennai, Kolkata, Hyderabad and Pune.
In a BSE filing, Tata Communications said ST Telemedia will acquire 74 per cent stake in company's "data centre business in India and Singapore for an estimated 100 per cent enterprise value of Rs 31.3 billion and SGD 232.4 million."
"ST Telemedia, a strategic global investor focused on the
communications, media and technology sectors, and Tata Communications, a leading global communications provider, today announce that they have entered into definitive agreements whereby ST Telemedia, through STT GDC, will buy a 74 per cent majority stake in Tata Communications' data centre business in India and Singapore," the statement said.

Tata Communications will remain as a significant shareholder, holding the remaining 26 per cent stake in the businesses.
The 14 data centres in India and three Singapore facilities "currently service a highly-diversified customer base, including blue chip enterprises in Asia, e-commerce platforms and global multi-national corporations", it said.
With this acquisition, STT GDC will further expand and strengthen its global data centre network to span four geographies, including strong bases in two of Asia's largest growth markets - India and China.
Vinod Kumar, Managing Director and CEO, Tata Communications, said: "This new joint venture partnership will now allow us to hone our strategic focus on advanced services within the data centre that enable digital transformation for our customers, in addition to infrastructure services."

It also "gives us the opportunity to redeploy capital behind other areas of our business, to further broaden the portfolio of services we can offer to meet our customers' current and future requirements", he said.
Sio Tat Hiang, Executive Director, ST Telemedia, said: "This partnership marks another key milestone in STT GDC's growth. Since ST Telemedia's initial investment in the data centre business in mid-2014, we have made remarkable progress in building a formidable data centre footprint internationally with strategic presence in key economic hubs to capture industry demand."
In 2014, the Indian data centre business of Tata Communications Limited was transferred to its wholly-owned subsidiary Tata Communications Data Centers Private Ltd (TCDC) through a High Court approved process. Today, TCDC owns and operates a total of fourteen data centres, including facilities in Delhi, Mumbai, Bengaluru, Chennai, Kolkata, Hyderabad and Pune.