Tech Mahindra's subsidiary divests stake in Altiostar Networks for $45 million

Indian IT services company Tech Mahindra said on Wednesday that its subsidiary has divested over 18.5 million shares in Altiostar Networks for around Rs 331 crore ($45 million).

The service provider's wholly-owned subsidiary Tech Mahindra (Americas) Inc. has sold its stake in the Bengaluru-based telecom company to Rakuten's USA, Inc., an internet service provider firm.

"Tech Mahindra (Americas) Inc - an l00 per cent subsidiary of Tech Mahindra Ltd - divested its holding of 18,518,518 C1 Preferred shares in Altiostar Networks," Tech Mahindra said in a regulatory filing.

Also Read: Tech Mahindra starts COVID-19 screening service 'Mhealthy' to detect antibodies

"As it is a minority investment, there is no contribution to turnover/revenue/income or net worth by Altiostar Networks, Inc during the last financial year," it added.

"The buyer is Rakuten USA, Inc," the filing further stated, adding that the consideration received from the sale is $45 million.

Rakuten Mobile and Tech Mahindra have also signed an agreement, where the Indian tech firm will be a preferred partner and provide technologies as well as software capabilities to support the development and deployment of mobile networks for global customers of RCP (Rakuten Communications Platform).

Through the agreement, Tech Mahindra will also provide managed IT, security and network services to Rakuten Mobile, the companies said in a joint statement.

Also Read: 2019 will be the year of growth for Indian IT, says Tech Mahindra MD CP Gurnani

There are also plans to designate Tech Mahindra as an official reseller of RCP, it added.

"This first of its kind collaboration with Rakuten Mobile not only strengthens our existing partnership with them but will also enable us to drive innovation in the telecom space, provide enhanced customer experience and lead the transformation in mobile network technology from the forefront," Tech Mahindra Managing Director and CEO C P Gurnani said.

Mickey Mikitani, Chairman, President and CEO of Rakuten Inc, also stated that with a common vision for digital transformation of the telecommunications industry, the company is very excited about the potential of the partnership with Tech Mahindra in bringing more agile, responsive and efficient services to customers around the world.

(With inputs from PTI)