RCom puts on hold $1.5-bn IPO of undersea unit

Written by Press Trust of India | New Delhi | Updated: Jul 21 2012, 05:54am hrs
Reliance Communications on Friday put on hold the $1-1.5 billion initial public offering of its underseas cable unit Flag Telecom in Singapore, in the wake of adverse market conditions. The IPO was put on hold on a day when institutional book building was to close, sources said.

RCom was looking at listing Flag Telecom through a Singapore business trust, Global Telecommunications Infrastructure Trust (GTIT) on the Singapore stock exchange. GTI Trust owns four subsea cable systems that carry internet traffic and data around the globe. The telecom major had planned to use the proceeds from the Singapore listing of GTI to pare some of its R 35,839-crore debts.

Sources said RCom is not in a rush to sell the assets and can afford to wait for positive market conditions, as it has already refinanced its FCCB of $1.2 billion in March with long-term Chinese loan.

Flag Telecom was acquired by the then undivided Reliance Group for $207 million (less than R1,000 crore) in 2003.

As part of the telecom portfolio of the erstwhile Reliance group, Flag Telecom later came into the fold of Anil Ambani-led group after the split between the two Ambani brothers. RCom has been exploring various routes of raising funds, including selling stake in its telecom tower arm Reliance Infratel, a move that will help the company retire a major chunk of debt on its books.

As of March 31, 2012, RCom has a net debt of R35,839.3 crore on its books.