Tata Communications to sell data centre business for over Rs 3,300 crore

Tata Communications is planning to sell 74% stake in its data centre unit for about $500 million (or Rs 3326.5 crore), a Times of India report has said. 

Temasek Holdings'-owned Singapore Technologies Telemedia (STT) has come forward to buy the stake in the Tata Group company, the report added. 

Tata Communications will continue to hold the other 26% in the business. 

According to the report, talks about a majority stake sale have been in the fray since last year as the data centre business has failed to produce adequate returns despite huge capital investments, the report said. Another reason is that the company wants to cut its debt of $1.4 billion (nearly Rs 8,844 crore), it added.

At this stake sale price, the data centre business of Tata Communications has been valued at $670 million.

The buying interest from ST Telemedia was not unexpected as the Temasek-led company is expanding rapidly through various investment deals. 

Standard Chartered Bank is the advisor for the deal while Jeffries & Co is running the sale process.