Reliance Comm mulling minority stake sale to AT&T?
07 Jun 2010
Anil Ambani-led Reliance Communications is reported to be in talks with AT&T, the second largest cellular operator in the US behind Verizon, about a potential sale of a considerable minority to the US telecom giant.
The move comes after the Ambani brothers – Mukesh and Anil – had agreed late last month to set aside their differences and dump the 'non-compete' arrangements entered into between the two groups in January 2006, saying this would ''eliminate any room for further disputes.'' (See: Ambanis finally agree to dump old pact, start afresh)
After dumping the 'non-compete' arrangements, the board of Reliance Communications approved in principle the dilution of a 26-per cent stake to finance the rollout of its 3G mobile services.
Citing people familiar with the matter, The Wall Street Journal reported yesterday, that both, Reliance Communications and AT&T are exploring the idea, where the Dallas, Texas-based AT&T would take a significant minority stake in Reliance Communications.
The paper cautioned that a deal was not imminent as one of the hurdles was that the US telecom major prefers to take a majority stake, which Anil Ambani, who owns over 67 per cent off Reliance Communications, is not willing to part with.
Nevertheless, the move comes after heightened media reports last week that Reliance Communications is also in talks to sell a 25-per cent stake to Emirates-based telecom major Etisalat (See: Etisalat in talks for 25-per cent stake in Reliance Communications?)
It is also being speculated that Reliance Communications may reopen merger talks with South Africa's MTN, (See: R-Com may re-open merger talks with MTN: report), which failed two years ago when Mukesh Ambani, who heads India's most valuable private group Reliance Industries Ltd, cliamed a right of first refusal acquiring a stake in Reliance.
Communications.
But MTN, which is currently in talks to buy assets from Egypt's Orascom Telecom, denied reports that it was back in talks with Reliance Communications. (See: MTN denies talks Reliance Communications)