Secure electronic transaction solutions provider Keycorp Limited (ASX:KYC) has approved the sale of its transaction network solutions (TNS) business to Telstra and a 41 cent per share pro-rata capital return to shareholders, in a deal worth $55 million.

In the meeting today, shareholders were asked to consider the sale to Telstra of all of its shares in Keycorp Solutions Limited, Keycorp's wholly owned subsidiary in which the TNS business resides, for $55 million.

In a second and interdependent resolution, shareholders were also asked to approve the pro-rata capital return, representing approximately 60% of the proceeds from the TNS sale.

The Explanatory Memorandum provided to shareholders prior to the meeting explained that Keycorp would retain approximately $20 million in cash from the proceeds of the TNS sale.

"Keycorp intends to use these funds, potentially together with an appropriate level of debt funding, to acquire businesses that will assist Keycorp in achieving its stated strategic vision of transforming Keycorp from a product based business to a services and solutions based company built around payments and security," said chairman Malcolm Irving.

The transactions have no effect on Telstra's shareholding in Keycorp which is currently approximately 47.8% of issued shares.