RCoVL eyes $500 m through FCCBs

Mumbai, March 21 | Updated: Mar 22 2006, 05:30am hrs
Reliance Communications Ventures Ltd (RCoVL), the flagship company of the Reliance-Anil Dirubhai Ambani Group (R-ADAG), will raise up to $500 million in the international market. In a notice to the Bombay Stock Exchange (BSE) on Tuesday, RCoVL said that the board of directors of the company had approved the raising of long-term resources through issue of foreign currency convertible bonds (FCCBs) at a premium to the market price of the equity shares of the company, subject to all necessary permissions, sanctions and approvals. RCoVL is India's No 2 mobile phone operator. The fund is being raised to fund expansion in the world's sixth-largest cellphone market by subscribers.

FAST FORWARD
IN CONSOLIDATION MODE
At stake is expansion in the world's sixth-largest cellphone market
RCoVL to merge Reliance Infocomm with itself
TRACK RECORD
RCoVL gained 0.12% to close at
Rs 320.45 in volatile trading session on BSE
Recently, the younger Ambani reorganised his part of the Reliance empire and increased his holding in the company from 40% to 63%. This made him the second richest Indian. RCoVL will merge Reliance Infocomm Ltd with itself and hold 100% in three subsidiaries - Reliance Telecom Ltd (RTL), Reliance Communications Infrastructure Ltd (RCIL) and FLAG Telecom.

"Reliance Communications is a good investment because of its sheer size and strong promoters," said RK Gupta, who manages $46 million at Credit Capital Asset Management Co in New Delhi. Mr Gupta plans to buy more RCoVL shares and also purchase Bharti Tele-Ventures Ltd during stock declines. RCoVL gained 0.12% to close at Rs 320.45 in volatile trading session on BSE.

"The demand for telecommunications in India has attracted nearly $800 million foriegn investment in India in 2005. The sector is expected to attract another $855 million on next two years," points out Elcoteq's white paper titled "India - Telecom Manufacturing in Fast Forward Mode".