Reliance Communications Ltd, has agreed to sell 5
per cent of the equity share capital of its fully-owned
tower business for Rs1,400 crore. Reliance Telecom Infrastructure
Ltd (RTIL) to a group of leading institutional investors
across the US, Europe and Asia.
transaction will result in substantial unlocking of the
company''s value with a cash inflow of Rs1,400 crore ($337.5
million), the benefits of which will go to the company
and its over 2 million shareholders, the company said
in a filing with the Bombay Stock Exchange (BSE).
capital gains arising out the sale of the 5 per cent stake
in RTIL will be amount Rs1,200 crore ($280 million).
sale values RTIL at Rs27,000 crore ($6.75 billion) or
approximately Rs135 per company''s equity share, which
is nearly 25 per cent of its current market price of Rs565
offering was heavily oversubscribed with a total order
book in excess of $2 billion.
Reliance Communications'' residual 95 per cent stake in
RTIL is valued at $6.40 billion (Rs26,000 crore), and
the company will pursue opportunities for further unlocking
of value through an RTIL, IPO and / or strategic sale
at an appropriate time.
are excited about the tremendous growth potential in the
Indian telecom infrastructure business. Our strategy to
create a separate company for infrastructure business
has resulted in tremendous unlocking of value for RCom
shareholders," Anil Dhirubhai Ambani, chairman of
the company, said.
as an independent telecom infrastructure provider, has
significant growth potential and is on track to become
the leading player in India. RTIL will be listed in the
near future and provide investors another attractive opportunity
to participate in India''s incredible telecom growth,"
Communications will spend Rs8,000 crore in the fiscal
year ending March 2008 to add another 23,000 telecom towers
to its existing network of around 14,000 towers, Ambani
said, adding, RTIL is evaluating a possible initial public
offer or further strategic equity sales for the spun-off
help finance the towers, RTIL would independently raise
debt of $1.5 billion to $1.75 billion during 2007/08,
Ramesh Venkat, group president of finance and treasury
JP Morgan acted as the exclusive financial advisor in