Tata Communications would sell a 74 percent stake in its data centre business to Singapore Technologies Telemedia (ST Telemedia) for about $630 million (about Rs. 4,239 crore). The deal also involves takeover of debt by ST Telemedia.
ST Telemedia is a Singapore-based strategic investor that focuses on technology, media and communication businesses across the world. However, Tata Communications will continue to hold 26 percent stake in the business, Reuters reported.
The deal is expected to be inked in the next few weeks.
"The sale will bring in cash, which will improve our balance sheet. It will help us invest in newer areas such as cloud and e-commerce. The new partner will co-invest and help in expanding the data centre business," Rangu Salgame, Tata Communications' chief executive for growth ventures, was quoted as saying by the Mint.
In addition, the Tata Comm-ST Telemedia deal also includes a stake sale of 74 percent in Tata's 14 data centres in India for around $462 million (about Rs. 3,111 crore) and stake sale in three other Singapore data centres for about $168.37 million (around Rs. 1,131 crore).
Mumbai-based Tata Communication is a telecom company, whose infrastructure includes sub-sea terrestrial communication network, data centres, fixed line and wireless service.
The Tata Communications stock closed at Rs. 442.50 on Thursday, down 1.63 percent from its previous close on the Bombay Stock Exchange.