Tata Communications (Hong Kong) Ltd, a wholly-owned indirect subsidiary of Tata Communications Ltd and the shareholders of China Entercom Communications Ltd (CEC) have jointly withdrawn their equity joint venture application with the Chinese government. Both organisations have mutually agreed to terminate the various agreements memorialising Tata Communications' equity investment in CEC.
CEC and Tata Communications will continue with their existing network services co-operation relationship and have also entered a new co-operation agreement whereby Tata Communications and CEC will work together on a commercial basis to allow Tata Communications to benefit from access to CEC's network and assets in China, as Tata Communications continues to focus on this key market.
The companies mutually agreed to withdraw the equity joint venture application due to the uncertainty of whether any regulatory approvals from the Chinese authorities were forthcoming. While the equity joint venture has been called off, the Tata Communications will continue to work with CEC to further their plans in China.Through the co-operation with CEC, Tata Communications will provide virtual private network (VPN) services to the main cities of China.
On Thursday, Tata Communications' shares ended 4.03% up at Rs250 on the Bombay Stock Exchange, while the benchmark Sensex closed 1.59% up at 16,922 points.
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