RCom closes up on Citic Telecom deal report
23 May 2014
Shares in billionaire Anil Ambani-controlled Reliance Communications (RCom) closed up 4.07 per cent on Friday, after various media reports said it was in talks with China's Citic Telecom to sell its stake in its submarine cable unit.
The company's shares closed up 5.65 points at Rs144.35 apiece on the Bombay Stock Exchange (BSE), which closed up 1.31 per cent.
RCom, according to various media reports, was in talks with Citic Telecom, as it intends to pare debt of about $1.8 billion (as of March 2014). RCom's cable assets are held by its recently rebranded unit Global Cloud Exchange (earlier known as Reliance Globalcom) and are believed to be valued at $1 billion.
The Hong Kong-listed company beat two other bidders from West Asia for the equal joint venture. Standard Chartered is advising Citic Telecom on the transaction and Hong Kong-based investment bank IRG is the advisor for RCom.
''It is the policy of the company not to comment on speculation,'' an RCom spokesperson said.
RCom had earlier made many attempts to reduce liability by selling stakes in units, the latest being in March 2013 when it made an attempt to offload equity in sub-sea unit Reliance Globalcom.
RCom was in talks with Bahrain Telecommunications Co (Batelco) to sell stake in Reliance Globalcom. Batelco was looking to acquire a majority stake in the company and had valued Reliance Globalcom at $1.3 billion. However, the deal did not materialise.
For RCom, this the one of the many unsuccessful attempts. The earlier ones included withdrawal of its Reliance Globalcom's submarine cable unit's initial public offering and failed stake sale in tower unit, Reliance Infratel.