Singapore Technologies Telemedia has emerged as the front-runner to acquire majority stake in the data center business of Tata Communications.
"ST Telemedia is the top contender to buy Tata Communications' data centre business," an industry source told PTI.
According to the source, ST Telemedia is in talks to buy 74 per cent stake in the entity managing the data centre business for about USD 650 million and the negotiations are at an advanced stage.
Tata Communications plans to use the proceeds from the deal to reduce its debt. The company's core business debt at the end of December 2015 stood at around USD 1.4 billion.
When contacted, Tata Communications said that as per company's policy, it does not comment on market rumours.
"We had earlier also confirmed vide our press release dated 23 July 2015 that the company has been exploring various strategic options for its data centre infrastructure business in India and potentially Singapore," the company said.
The company has 44 data centers of which 14 are located in India.
ST Telemedia too declined to comment.
"It is our company's practice not to comment on market speculation," ST Telemedia spokesperson Melinda Tan said.
ST Telemedia's key business segments comprise communications and media services, network services, data centres and emerging technologies.
