STT makes Tata Communication an offer it can't refuse

Temasek Holdings-backed Singapore Technologies Telemedia (STT) is eying to buy a stake in Tata Communications’ data centre business and has the best deal yet.

STT is the front-runner to get the controlling stake in the data centre business, which is valued at around Rs 4,500 crore.

Reportedly, whosoever is the buyer will acquire up to 74% of data centre operations in India and abroad and Tata Group will have a minority holding.

Apart from STT, Google Inc, Amazon, Carlyle Group, Advent International, Blackstone and Bain Capital have also shown interest.

STT has earlier invested in Equinix and CenturyLink Technology Solutions.

Tata Communications, which reported a raise in 1.2% in total revenue to Rs 5, 130.1 crore, has data centres operating in the US, the UK and Singapore.

The data centre business contributed 27% of managed services revenue and adds Rs 436 crore to Tata Communications' FY15 revenue.

As per reports, Tata Communication's core net debt increased by $ 81million in Q2 to reach $ 1.4 billion.