What Liquid Telecom gets from Neotel - TechCentral

What Liquid Telecom gets from Neotel

Neotel-640

Econet Wireless Global affiliate Liquid Telecom agreed to pay R6,55bn for South African telecommunications operator Neotel, creating the continent’s largest broadband network and business-to-business phone carrier. Shares of Tata Communications, which is selling the stake, surged.

The buyer is partnering with Royal Bafokeng Holdings, a South African empowerment investment group, which has committed to taking a 30% stake in Neotel, according to a statement from Mumbai-based Tata Communications, which acquired control of Neotel in 2009.

The deal gives Econet wireless spectrum and broadband access to South African businesses and homes and gives businesses across the continent access to 40 000km of cross-border fibre networks, according to an e-mailed statement from Liquid Telecom.

Econet, founded and run by Strive Masiyiwa, controls Liquid Telecom and mobile phone company Econet Wireless Zimbabwe.

“We’ll also be increasing investments into Neotel to cater for rapidly accelerating mobile and enterprise traffic,” Nic Rudnick, Liquid Telecom CEO, said in the statement.

For Tata, a transaction would advance an asset-sale push the coffee-to-cars conglomerate has been pursuing as chairman Cyrus Mistry seeks to pare debt and boost profit. Tata Steel, Tata Power and Indian Hotels, which wants to sell its Taj Boston hotel, are among group firms looking to dispose of non-core assets.

Tata Communications rose as much as 8% as of 1pm in Mumbai following the announcement. The shares have gained 6,3% this year, compared with a 1,7% increase in the benchmark S&P BSE Sensex index.

Four months ago, Johannesburg-based Vodacom abandoned a R7bn proposal to buy Neotel after almost two years of regulatory battles and legal opposition to the deal by competitors.  — (c) 2016 Bloomberg LP

Comments are closed.

© 2009 – 2020 NewsCentral Media