MUMBAI: India's largest private sector conglomerate Tata Group is selling South Africa's Neotel seven years after it acquired a controlling stake in that country's second largest fixed line telecom operator to Vodafone's SA unit Vodacom.
The deal is expected to value Neotel in which Tata Communications holds 68.5 percent at about $550 million, according to a Times of India (TOI) report Tuesday.
The transaction will mark the $100-Billion group's biggest and first overseas asset sale under chairman Cyrus Mistry.
Tatas decided to exit from Neotel late last year.
Since the company required long-term commitment and significant cash deployment in an intensely competitive market.
Tata Communications, which is delisting from the New York Stock Exchange, has been exploring options to deleverage the balance sheet.
Nexus Connection holds a 19 percent stake with Communitel owning the rest 12.5 percent in Neotel.
On Monday, Vodacom said that it has entered into exclusive negotiations to buy Neotel from its shareholders.
NM Rothschild is advising Vodacom, while Standard Chartered is the banker to Tata Communications.
The Neotel sale puts Tata Communications slows its efforts to transform itself into a global player in telecom.
The Mumbai-based Tata Communications' debt stood at US $1.982 Billion or Rs 123.620 billion as on March 31, the TOI report added. (QNA)