Tata Communications (TCL) is planning to hive off its data centre business into a subsidiary to unlock its value and enable it to raise funds without putting a strain on the parent company.
The company has appointed several organizations to deal with said matter, comprising McKinsey and Co. for strategy and business plans, Ernst and Young for structure and taxation issues, Kanga and Co. to assess real estate options, State Bank of India for fairness opinion, and Khaitan and Co. for companies Act-related issues.
In the past, the Tatas have faced problems raising debt in TCL and had to request the Centre to relax the debt ceiling. TCL, which is evaluating the possibilities of an all-cash bid of over $1 billion for UK's Cable and Wireless Worldwide, must get the government's approval before hiving off its data centre business.
Tata Communications owns and operates the world’s largest subsea cable network which reaches countries representing 99.7 percent of the world’s GDP.
