Tata Communications sell 74 percentage of data centre biz to ST Telemedia

Tata Communications, a telecom and data services infrastructure provider, has a network of undersea, terrestrial cables.

Published: 20th May 2016 04:12 AM  |   Last Updated: 20th May 2016 04:12 AM   |  A+A-

CHENNAI: TATA Communications will sell 74 per cent stake in its data centre business in India and Singapore to Singapore based ST Telemedia for around Rs 3,150 crore. The stake sale is focused toward paring debt and funding expansion, said the company while announcing the sale on Thursday.

Tata Communications, a telecom and data services infrastructure provider, has a network of undersea and terrestrial cables.

The deal with ST Telemedia Global Data Centres (STT GDC), a subsidiary of Singapore Technologies Telemedia (ST Telemedia), will see Tata Comm continue to hold the remaining 26 % stake in 14 data centres in India and three Singapore facilities.

The deal will close in the coming weeks, said Tata Communications in its statement, and both parties will work in tandem to ensure service continuity for customers and employee engagement.

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

“STT GDC will acquire 74 per cent stake in Tata Communications’ data centre business in India and Singapore. Tata Comms will remain a significant shareholder, holding the remaining 26 per cent stake in the businesses,” it said.

 “These centres currently service a highly-diversified customer base, including blue chip enterprises in Asia, e-commerce platforms and global multi-national corporations,” said the firm. According to the Bombay Stock Exchange filing made by Tata Communications, the stake will be sold for 100 per cent enterprise value of Rs 3,130 crore.

Tata Communications will remain as a significant shareholder, holding the remaining 26 per cent stake in the businesses.

“This new joint venture partnership will allow us to hone our strategic focus on advanced services within the data centre that enable digital transformation for our customers ,” said Vinod Kumar, Managing Director and Chief Executive Officer, Tata Communications, while Sio Tat Hiang, Executive Director, ST Telemedia, said: “This partnership marks another key milestone in STT GDC’s growth.

Stake being sold in 14 TCDC centres

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 - the centres in which the stake is being sold.


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