R-Com gets Singapore nod for Flag Telecom IPO
13 Jun 2012
Reliance Communications Ltd (R-Com) said today that the undersea cable unit of the company, Flag Telecom, has received approval from the Singapore Stock Exchange to list.
The Singapore exchange has granted "eligibility to list" the unit as a business trust, Reliance Communications said in a statement to the exchanges. It did not give details.
R-Com shares surged as much as 4.4 per cent by this afternoon after the announcement.
According to a Reuters report, the initial public offering (IPO) could raise over $1 billion.
The company, controlled by billionaire Anil Ambani, is looking to list the undersea cable unit as a business trust in Singapore and will use the proceeds from the proposed share sale to cut its debt burden, which was $7 billion as of March.
The company did not say when it plans the IPO. Reuters cited sources to say the IPO could be launched in July, but that would be difficult in a volatile market.
The undersea cable unit IPO is crucial for R-Com, which has been trying to raise about $3 billion by selling its telecom tower assets but has so far been unsuccessful.
Deutsche Bank, Standard Chartered, DBS and Industrial and Commercial Bank of China are the advisers for the IPO.