Tata Comms to sell 74%stake in data center to ST Telemedia for $630 mn

Tata Communications (Tata Comm) today said that it would sell a 74-per cent stake in its data center business to Singapore-based ST Telemedia Global Data Centres (STT GDC) for about $630 million including debt.

ST Telemedia is owned by Singapore sovereign wealth fund Temasek Holdings, which owns and manages assets worth around $177 billion.

The deal includes sale of a 74-per cent stake in Tata Comm's 14 data centers in India for $462.66 million, and a similar stake in its three Singapore data centers for $168.37 million.

Post closing, Tata Comms, the telecommunications arm of the Tata Group, will hold the remaining 26-per cent stake in the businesses, the company said in a statement.

Tata Communications, which provides telecom and data services infrastructure through its network of undersea and terrestrial cables, has been planning to sell non-core assets in order to cut debt.

Tata Comm, earlier known as Videsh Sanchar Nigam, had hired Jeffries & Co to run the sale process.

In 2014, Indian data centre business of Tata Comm was transferred to its wholly-owned unit Tata Communications Data Centers Private Ltd through a High Court approved process.

Today, TCDC owns and operates a total of 14 data centres, including facilities in Delhi, Mumbai, Bengaluru, Chennai, Kolkata, Hyderabad and Pune.

With this acquisition, STT GDC will further expand and strengthen its global data centre network to span four geographies, including strong bases in two of Asia's largest growth markets.

''This partnership marks another key milestone in STT GDC's growth. Since ST Telemedia's initial investment in the data centre business in mid-2014, we have made remarkable progress in building a formidable data centre footprint internationally with strategic presence in key economic hubs to capture industry demand,'' said Sio Tat Hiang, executive director, ST Telemedia.

''The latest addition of India to the STT GDC network will be a major impetus to advance the company's ambition to be a significant global data centre service provider,'' he added.