Tata Communications to hike stake in South Africa's Neotel to 56 per cent

25 June 2008

Mumbai: Tata Communications has agreed to acquire an additional 30 per cent in South African telecom firm Neotel, raising its stake to 56 per cent from the current 26 per cent.

Tata Communications along with Tata Africa Holdings will make the acquisition from state-owned enterprises, Eskom and Transnet, Tata Communications said  in a notice issued to the Bombay Stock Exchange.

The company, however, did not disclose the value of the acquisition.

Tata Africa Holdings, the investment arm of the Tata Group in South Africa, has operations in eight countries in the continent. The agreement, however, is subject to certain conditions to be fulfilled over a six-month period.

The acquisition will enable Tata Communications to offer its full global suite of products, including solutions for voice and data connectivity, managed security services, among others, the company said.

Neotel, which had planned infrastructure investments of Rand 11 billion, had problems with state-owned entities and expects the situation to improve with the exit of Eskom and Transnet.