RCom puts Flag Telecom IPO on hold, cites adverse market conditions

Reliance Communications (RCom), controlled by billionaire Anil Ambani, has put the $1.5-billion initial public offering of its submarine cable unit Flag Telecom on hold, citing adverse market conditions.

''The company states that it will await supportive market conditions and easing of prevailing global uncertainties to proceed with the offering and listing at an appropriate time in the future, in order to unlock the full value of the Flag Telecom assets in the best interests of its over 2 million shareholders,'' RCom said in a statement.

''Subsequent updates will be provided to the stock exchanges and relevant authorities in due course,'' it added.

RCom was looking to list Flag Telecom through a Singapore business trust - Global Telecommunications Infrastructure Trust (GTIT) - on the Singapore stock exchange. GTIT, which owns four sub-sea cable systems that carry Internet traffic and data around the globe, had filed preliminary prospectus with the Monetary Authority of Singapore on July 05, 2012 (See: Reliance Communications files for Singapore IPO).

The telecom company had planned to use the proceeds from the Singapore listing of GTI to pare some of its Rs 35,839 crore debts. RCom has been exploring various modes of raising funds, including selling stake in its telecom tower arm Reliance Infratel, to reduce debt.

According to various reports, RCom has extended the closing date for institutional book-building process by a day to Friday. This is the second time the company is extending the closing date of its IPO. The institutional book-building period for the offer had started on July 9.

Four sovereign wealth funds, including Singapore's Temasek Holdings and China Investment Corp, were to invest in GTIT, various media reports said. The funds from Singapore, the Middle East and China have confirmed participation of $250-300 million in GTIT's IPO, besides Temasek, CIC and Investment Corp of Dubai.