Tata Communications rallies on talks to sell stake in Neotel

MUMBAI: Shares of Tata Communications rallied in a subdued market on reports that the company is in talks with Vodacom SA to sell its stake in South African telecom Neotel.

The sale will also include the company's direct and indirect loan claims in Neotel. Vodacom and the Tata Communications have agreed to exclusively discuss and negotiate the key terms of the potential transaction in a Share Purchase Agreement.

Tata Communications owns 67.32 per cent in Neotel and the rest is held by CommuniTel and Nexus Connection.

“We believe this presents an exciting and attractive opportunity for all parties, especially our customers to whom we will be able to offer more meaningful and innovative products and services. This transaction, if concluded, would further enable Neotel to extend its footprint in South Africa and add the mobile capability that our customers require for their business’ growth in a new world of converged communications,” said Sunil Joshi, CEO, Neotel.

At 09:45 a.m. the stock was at Rs 196.60, up 4.52 per cent, on the BSE. It touched a high of Rs 199.80 and a low of Rs 195 in trade today.