Tata Communications to Acquire Majority Stake in Neotel
30% stake of Eskom and Transnet being acquired by Tata Communications
Mumbai, June 24, 2008: Tata Communications has entered into an agreement with Eskom and Transnet (two South African state-owned enterprises) to acquire their 30% interest in Neotel, the second telecommunications network operator in South Africa.
This agreement is subject to the fulfillment of certain conditions precedent, some of which have a period of up to 180 days to be fulfilled. The other shareholders of Neotel are Nexus, Communitel and Two Telecom Consortium.
Upon the implementation of the agreement, Tata Communications together with Tata Africa would hold an effective 56% stake in Neotel.
About Tata Communications Limited
Tata Communications Limited together with its global subsidiaries ("Tata Communications") is a leading global provider of the new world of communications. The company leverages its Tata global network, vertical intelligence and leadership in emerging markets to deliver value-driven, globally managed solutions to the Fortune 1000 and midsized enterprises, service providers and consumers.
The Tata Communications portfolio includes transmission, IP, converged voice, mobility, managed network connectivity, hosted data center, communications solutions and business transformation services to global and Indian enterprises and service providers, as well as broadband and content services to Indian consumers. The Tata Global
Network encompasses one of the most advanced and largest submarine cable networks, a Tier-1 IP network, connectivity to more than 200 countries across 300 PoPs, and more than 1 million square feet of data center space.
Tata Communications serves its customers from its offices in 80 cities in 40 countries worldwide. Tata Communications' strategic investment in the South African operator, Neotel, provides the company with a strong anchor to build an African footprint.
As the number one global wholesale voice operator and number one provider of international long distance, enterprise data and Internet services in India, the company was named "Best Wholesale Carrier" at the World Communications Awards in 2006 and was named the "Best Pan-Asian Wholesale Provider" at the 2007 Capacity Magazine Global Wholesale Telecommunications Awards for the second consecutive year.
Now the leading integrated provider to drive and deliver a new world of communications, Tata Communications became the unified global brand for VSNL, VSNL International, Teleglobe, Tata Indicom Enterprise Business Unit, and CIPRIS on February 13, 2008.
Tata Communications is a part of the $29 billion Tata Group. It is listed on the Bombay Stock Exchange and the National Stock Exchange of India and its ADRs are listed on the New York Stock Exchange (NYSE: TCL).
About Tata Africa
Tata Africa Holdings (Pty) Limited is the investment arm of the Tata Group of companies in South Africa. It has operations in 8 countries in Africa.
Neotel is South Africa's first converged communications network operator. It provides a range of value-added voice and data services for businesses, wholesale network operators and providers, including consumers using its pure-IP Next Generation Network, powered by Neotel's high-performance fibre optic backbone. Neotel connects the major centres in South Africa to each other and to the world, directly linking the country into Tata Communication's global Tier 1 network. Neotel offers fresh thinking, a creative approach and flexible solutions for communications in South Africa.
Transnet Limited ("Transnet") is the custodian of port, rail and pipeline infrastructure in South Africa. The Minister of Public Enterprises controls the entire issued share capital on behalf of the South African Government. Transnet operates the country's railways, ports, and pipelines, and is the dominant player in transport in Southern Africa. The major transport businesses of the Transnet group are each dominant in the industries in which they operate. Transnet has recently completed the transformation from a diversified conglomerate into a focused freight, transport and logistics provider.
Eskom Holdings Limited ("Eskom") is a vertically integrated state owned business that generates, transmits and distributes electricity. It is a self-financing business operating on the business principles of long-term viability, customer focus, efficient use of scarce and valuable resources and continuous improvement in performance to the benefit of its customers. Its suite of 24 power stations has a total nominal capacity of 42,011 megawatts, making Eskom the largest power utility on the African continent.
Eskom generates approximately 95% of the electricity used in South Africa and more than half of the total electricity consumed on the African continent. It is the world's eleventh largest power utility in terms of generation capacity, and the worlds seventh largest in terms of sales. Eskom has been the lowest in terms of world industrial electricity prices for several years and remains committed to making electricity available at the lowest possible price to all South Africans.
Forward-looking and cautionary statements
Certain words and statements in this release concerning the abovementioned companies, their prospects, their expected financial position, business strategy, future development of operations and the general economy in India, South Africa and Namibia are forward-looking statements. Such statements involve known and unknown risks, uncertainties and other factors, which may cause actual results, performance or achievements of these companies, or industry results, to differ materially from those expressed or implied by such forward-looking statements. Such forward-looking statements are based on numerous assumptions regarding these companies' present and future business strategies and the environments in which they operate.