RComVL to raise $500 million from FCCB issue

Our Corporate Bureau
21 March 2006

Reliance Communication Ventures (RComVL), the holding company of Reliance Infocomm and Reliance Telecom, would raise up to $500 million from a foreign currency convertible bond (FCCB) issue in the international markets.

The company said the issue would be made at a premium to the market price of the equity shares. The possible dates of the issue have not been disclosed. The issue is subject to shareholder and regulatory approval.

RComVL had announced major investment plans for expanding its telecom operations. The company is planning to pump in nearly Rs 15,000 crore over the next three years. Much of these investments would go to expand the CDMA network of Reliance Infocomm to cover smaller towns and rural areas.

The company had recently announced the merger of Reliance Infocomm with itself while other operating companies like Reliance Telecom and Reliance Communications Infrastructure would become fully owned subsidiaries of RComVL.

Promoters' shareholding in the company would increase to around 63 per cent after the restructuring as their shareholding in the operating companies would get consolidated in RComVL. The company's share capital, which would increase by two-thirds after the restructuring, would further go up on conversion of the FCCB's.

RComVL is trading at Rs 319.9 (down 0.03 per cent) at 12.25 PM on the NSE today.