Shares of Tata Communications on India’s Bombay Stock Exchange (BSE) rose over 3% in trade on Monday to hit Rs 304.25 after Vodacom announced plans to buy Neotel for R7 billion.
Tata Communications owns a 67% stake in Neotel, which provides fixed line communications in South Africa.
Vodacom; meanwhile, is South Africa’s largest mobile network with 30 million customers in the country.
On Monday, Vodacom announced that it has agreed to buy Neotel for R7 billion, pending regulatory approval in South Africa. Vodacom expects the deal to be sealed before year-end.
The announcement of the deal couldn’t come at a better time for Tata Communications, which reported a net loss of Rs 1.231 billion for the fourth quarter ended 31 March.
The loss was attributed to an impairment charge of Rs 1.50 billion on Neotel, pending the proposed sale of the company.
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