Singapore company in fray to buy Tatas' data centre business
MUMBAI: Singapore Technologies Telemedia, an investment unit of Temasek Holdings, has emerged as a strong contender to buy Tata Communications' data centre business in a deal estimated at about $700 million (Rs 4,421 crore), people with the knowledge of the matter said.
A deal to acquire the business, which has 44 data centres globally, is being worked out, said the people, adding that the process, however, remains competitive as one more party is aggressively pursuing the business.
Tata Communications is selling the data centre business as the unit requires huge capital and the returns on in vestment have a long payback period. Moreover, the telecommunications arm, part of the country's largest conglomerate, the Tata Group, wants to bring down its debt of $1.4 billion (Rs 8,844 crore).
An email query sent to Tata Communications didn't elicit any response till the time of going to press. In vestment bank Jeffries is ad vising Tata Communications (formerly VSNL) on the sale process. The data centre business of Tata Communications, in which the Indian government is a strategic investor with a 26% stake, has revenues of over $150 million (Rs 948 crore). A significant number of the company's data centres are based in India, which clocked Rs 436 crore in revenue and had an operating profit of 27% in fiscal 2015.
Tata Communications, said the people quoted earlier, could hold a minority stake in the data centre business.
The interest from Singapore Technologies Telemedia or ST Telemedia, a pioneer in data centres in Singapore that dates back to the late 1990s, is to expand this business, particularly in a growing economy like India.Recently , ST Telemedia made a significant investment in UK's Virtus Data Centres.
The Tata Group and Temasek Holdings have a long association with the sovereign wealth fund being one of the first private equity investors in some of the Tata companies including Tata Teleservices. Also Tata Group chairman emeritus Ratan Tata is currently a trustee of the fund's philanthropic arm, Temasek Trust.
Economic Times reported in August that search engine giant Google and ecommerce major Amazon are eyeing Tata Communications' data centre business, which is the second biggest player in India after Reliance Communications.
The sale of Tata Communications' data centre business comes at a time when several global titans like Microsoft are planning to set up such facilities in Asia's third largest economy.
A deal to acquire the business, which has 44 data centres globally, is being worked out, said the people, adding that the process, however, remains competitive as one more party is aggressively pursuing the business.
Tata Communications is selling the data centre business as the unit requires huge capital and the returns on in vestment have a long payback period. Moreover, the telecommunications arm, part of the country's largest conglomerate, the Tata Group, wants to bring down its debt of $1.4 billion (Rs 8,844 crore).
An email query sent to Tata Communications didn't elicit any response till the time of going to press. In vestment bank Jeffries is ad vising Tata Communications (formerly VSNL) on the sale process. The data centre business of Tata Communications, in which the Indian government is a strategic investor with a 26% stake, has revenues of over $150 million (Rs 948 crore). A significant number of the company's data centres are based in India, which clocked Rs 436 crore in revenue and had an operating profit of 27% in fiscal 2015.
Tata Communications, said the people quoted earlier, could hold a minority stake in the data centre business.
The interest from Singapore Technologies Telemedia or ST Telemedia, a pioneer in data centres in Singapore that dates back to the late 1990s, is to expand this business, particularly in a growing economy like India.Recently , ST Telemedia made a significant investment in UK's Virtus Data Centres.
The Tata Group and Temasek Holdings have a long association with the sovereign wealth fund being one of the first private equity investors in some of the Tata companies including Tata Teleservices. Also Tata Group chairman emeritus Ratan Tata is currently a trustee of the fund's philanthropic arm, Temasek Trust.
Economic Times reported in August that search engine giant Google and ecommerce major Amazon are eyeing Tata Communications' data centre business, which is the second biggest player in India after Reliance Communications.
The sale of Tata Communications' data centre business comes at a time when several global titans like Microsoft are planning to set up such facilities in Asia's third largest economy.
No comments:
Post a Comment