Mumbai, May 19 (IANS) Tata Communications Monday announced it would sell its 67 percent stake in South African telecom unit Neotel to Vodacom -- an arm of Vodafone Group -- for around $676 million (7 billion South African Rands).
"The shareholders of Neotel and Vodacom SA have announced today that they have favourably concluded an agreement on the commercial structure and terms to proceed for Vodacom to acquire 100 per cent of the shares of Neotel valued at an enterprise value of ZAR 7.0 billion," Tata Communications said in a statement.
"Tata Communications is pleased with the outcome of this deal. It is in line with our financial objectives while paving the way for Neotel to improve its value proposition in the South African market," Vinod Kumar, managing director and chief executive officer, Tata Communications said.
The company in the statement said the parties will immediately start the necessary processes to obtain regulatory and competition authority approvals for the structure and commercial terms of the deal.
Neotel is South Africa's first converged communications network operator. It provides a range of value-added voice, internet and data services for businesses, wholesale network operators and providers and retail customers.
"We are encouraged at the progress made to date and will focus now on ensuring compliance with the regulatory approvals processes and the engagement with the competition authorities," said Sunil Joshi, managing director and chief executive officer of Neotel.
Tata Communications and Vodacom had entered into discussions for Neotel acquisition last September.
"This transaction will impact the landscape of the telecommunications industry in South Africa. We believe it will enhance the customer experience and benefit the South African public," Kennedy Memani, Nexus Connexion said.
Nexus Connexion was formed in April 2002 for the specific purpose of being the Black Economic Empowerment (BEE) partner for Neotel.
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