Tata Communications to sell Neotel to Liquid Telecom; stock up nearly 5%

After Tata Communications announced to sell equity stakes in its South African telecom unit Neotel to Liquid Telecom, the stock of the company was trading up nearly 5% in the morning trade on Tuesday. 

The shareholders of Neotel – Tata Communications of India and minority shareholders led by Nexus Connexion – have agreed for Liquid Telecom to acquire Neotel for South Africa Rand 6.55 billion. 

Liquid Telecom, is a subsidiary of the privately held and diversified telecommunications group Econet Wireless Global.

Liquid Telecom is partnering with Royal Bafokeng Holdings (RBH), a South African empowerment investment group, which has committed to take a 30% equity stake in Neotel, Tata Communications said in a release. 

“Liquid Telecom is the right partner for the next phase of Neotel’s evolution. Convergence of technologies and services will be the key driver of growth across the globe and this transaction will encourage inclusion and support the growth aspirations of the African continent,” Tata Communications' managing director and chief executive officer, Vinod Kumar, said in a press release.

At 10:58 hours, the stock of Tata Communications was trading up 4.57% or Rs 20.55 at Rs 470.15 on the Bombay Stock Exchange (BSE) on Tuesday.