RCom enters into fresh talks with a global private equity consortium, including Samena Capital, for stake sale

Anil Ambani-promoted Reliance Communications? (RCom) talks with Bahrain-based telecom major Bahrain Telecommunications Company (Batelco) for selling a stake in its subsidiary firm Reliance Globalcom have failed.

In a notice to the stock exchanges on Saturday, RCom said it has now entered into discussions with a consortium of private equity (PE) funds, including Samena Capital, for a possible stake in Reliance Globalcom.

?We confirm that Samena Capital, in a proposed consortium with certain other global PE funds, is at an advanced stage of the process of due diligence and completion of definitive documents in relation to the acquisition of Reliance Globalcom,? RCom said in a notice to the stock exchanges. ?The deal is expected to be completed by May this year.? However, the company added that there ?there can be no certainty that this will lead to a transaction?.

RCom did not cite any reason as to why talks with Batelco fell through. ?RCom and Samena Capital are no longer in discussions with Batelco for the purposes of the above transaction,? RCom said. Samena was said to be backing Batelco to buy stake in Reliance Globalcom, according to some reports. Samena Capital is an investment group focusing on principal investments in the subcontinent, Asia, West Asia and North Africa.

Last month RCom had said that it was in talks with Batelco for a possible stake sale in Globalcom. Reliance Globalcom operations include a fibre business under Yipes in the US, management services business under Vanco in the UK and Flag Telecom. It provides voice, internet and value-added services. Its 65,000-km sub-sea telecommunications infrastructure network business has strong relationships with around 400 enterprise customers globally.

RCom has a high debt of around R37,360 crore and has been looking for ways and means to reduce it through some stake sales in its ventures. It had earlier tried to sell stakes in its tower arm Reliance Infratel to another tower firm GTL, but the deal fell through.

Last year, Anil Ambani had said the company is in ?advanced stages of negotiations with a number of consortia that have expressed great interest in this very valuable asset (tower business)?. But the deal never came through.

What made matters worse was the Singapore initial public offering by its undersea cable unit, which had to be shelved due to harsh market conditions. This offering could have helped the company raise up to $1 billion.

Its board some years back had authorised it to look for strategic partners for up to 26% stake in RCom. Recently, the company inked a R1,200-crore agreement with Mukesh Ambani-owned Reliance Jio Infocomm (RJI), under which RJI will share RCom?s optic fibre cable (OFC) network.

RCom also signed deals with Sweden-based Ericsson and France-based telecom equipment maker Alcatel-Lucent.