Tata Communications rose 3.56% to Rs 304.25 at 14:52 IST on BSE after the company announced next steps in proposed Neotel and Vodacom transaction.
The company made the announcement during trading hours today, 19 May 2014.
Meanwhile, the BSE Sensex was up 252.13 points, or 1.05%, to 24,373.87.
On BSE, so far 1.65 lakh shares were traded in the counter, compared with an average volume of 95,685 shares in the past one quarter.
The stock hit a high of Rs 315.75 and a low of Rs 295 so far during the day. The stock hit a 52-week high of Rs 319.50 on 7 January 2014. The stock hit a 52-week low of Rs 136.90 on 5 August 2013.
The stock had underperformed the market over the past one month till 16 May 2014, falling 4.46% compared with 8.28% rise in the Sensex. The scrip had also underperformed the market in past one quarter, rising 1.73% as against Sensex's 18.44% rise.
The mid-cap company has an equity capital of Rs 285 crore. Face value per share is Rs 10.
The shareholders of Neotel and Vodacom SA have announced that they have favourably concluded an agreement on the commercial structure and terms to proceed for Vodacom to acquire 100% of the shares of Neotel valued at an enterprise value of 7 billion ZAR (South African Rand). This follows the announcement late last year that the parties were entering into exclusive talks for a due diligence, Tata Communications said in a statement.
The structure of the deal and its commercial terms remain subject to regulatory and competition authority approvals and the parties will be immediately commencing the necessary processes in that regard, the company said.
Vinod Kumar, MD and CEO, Tata Communications says, "Tata Communications is pleased with the outcome of this deal. It is in line with our financial objectives while paving the way for Neotel to improve its value proposition in the South African market."
Sunil Joshi, MD & CEO of Neotel says, "We are encouraged at the progress made to date and will focus now on ensuring compliance with the regulatory approvals processes and the engagement with the competition authorities. Neotel continues to grow in the South African market and with this, when approved, will enable a greater choice of products and services for our customers and increased competition, while Neotel continues to deliver improved services and grows its customer base."
Kennedy Memani, Nexus Connexion says, "This transaction will impact the landscape of the Telecommunications industry in South Africa. We believe it will enhance the customer experience and benefit the South African public."
Neotel, in which Tata Communications owns around 67% stake, is South Africa's second biggest fixed-line phone operator. It provides a range of value-added voice, internet and data services for businesses, wholesale network operators and providers and retail customers using its IP Next Generation Network.
Vodacom is a mobile communications company providing voice, messaging, data and converged solutions to around 50 million active customers in Africa. It is majority owned by Vodafone, one of the world's largest mobile communications companies by revenue, and it is listed on the Johannesburg Stock Exchange (JSE). Vodacom's head office is in Johannesburg, South Africa and its operations include networks in Tanzania, the Democratic Republic of Congo, Mozambique, Nigeria and Lesotho.
On a consolidated basis, Tata Communications reported a net loss of Rs 123.19 crore in Q4 March 2014 higher than net loss of Rs 5.20 crore in Q4 March 2013. Net sales jumped 18.5% to Rs 5215.31 crore in Q4 March 2014 over Q4 March 2013.
Tata Communications along with its subsidiaries is a leading global provider of A New World of Communications. With a leadership position in emerging markets, Tata Communications leverages its advanced solutions capabilities and domain expertise across its global and pan-India network to deliver managed solutions to multi-national enterprises, service providers and Indian consumers. The Tata Communications global network includes one of the most advanced and largest submarine cable networks and a Tier-1 IP network with connectivity to more than 200 countries and territories across 400 PoPs, as well as nearly 1 million square feet of data centre and collocation space worldwide.
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