 "Tata Communications to announce stake sale in data centre unit")
Tata Communications is set to divest its stake in its data centre business. According to sources, the company will divest 74 per cent stake in the data centre business for Rs 4,000-4,500 crore. In a meeting late in the evening on Wednesday, the company updated its board of directors about its effort to sell stake in data centre infrastructure in India and Singapore, which is housed under its subsidiary, Tata Communications Data Centre. The update follows the July 2015 announcement about its plan to sell stake.
The deal is to be announced with the execution of "binding and definitive agreement with respect to the sale", said the company. While there was speculation in the media that Singapore Technologies Telemedia, a unit of Temasek Holdings, was buying the stake, the company declined to comment on the buyer's name.
The company plans to use the money from the sale to reduce its debt, which stood at Rs 9,595 crore on a consolidated basis in September 2015. According to the company's 2014-15 annual report, it had a 20 per cent share of the Indian enterprise data market and a 28.5 per cent share of the Indian data centre market.
Tata Communications provides data centre services in India, besides the US, the UK and Singapore. In India, it has facilities in New Delhi, Mumbai, Bengaluru, Chennai, Kolkata and Pune and some Tier-II and Tier-III towns. It has 44 data centres and co-location centres with around one million sq ft of space. It also has eight partner sites across Australia, Malaysia, Germany and the Netherlands.
According to Tata Communications' annual report, the data centre unit's profit fell 65 per cent to Rs 8 crore in the year ended March 2015 from Rs 23 crore in the previous year. Data centre revenues rose 16 per cent to Rs 436 crore from Rs 375 crore.
