Datatec has announced that it has reached an agreement to sell its 76% stake in UUNet SA to WorldCom, the minority partner in the business and parent of the UUNet international business.
The value of the deal has not been made public, as Datatec says details still need to be ironed out, but a final number has apparently been agreed on. Approval from the Reserve Bank and other regulators must also still be obtained.
In announcing its interim results last week, Datatec said it was considering a JSE listing for UUNet, but would continue negotiations for its sale.
Mendel Karpul, Datatec representative on the UUNet board, described the deal as a "major step forward as the provider of corporate network and Internet services positions itself for telecommunications deregulation," according to a statement from the company.
He says there had been a breakthrough in the "protracted negotiations" with WorldCom.
"While it has taken a long period of negotiation to come to fruition, the resolution of this deal at this time will be equally good for UUNet SA and Datatec," says Datatec executive chairman Jens Montanana.
"On the one hand it will wholly align the business with WorldCom Inc, the global parent company for which Internet service provision is a core competence. On the other hand, it will contribute directly to streamlining Datatec`s globally focused networking distribution and e-services operations and eliminate the group`s net borrowings, providing us with cash resources to pursue and settle acquisitions."
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