Tamasek, Chinese bank to take stake in RCom's cable business

Tamasek Holdings Pte and China Investment Corp have agreed to invest an unspecified amount in Global Telecommunications Infrastructure Trust's (GTI Trust), initial public offering (IPO), say reports.

The undersea cable unit of Anil Ambani-led Reliance Communications Ltd (Rcom) aims to reduce the debt burden on the parent company by raising $1 billion through a share sale on the Singapore exchange.

GTI Trust is selling $250 million to $300 million of stock to four sovereign wealth funds. Earlier there were reports that the bookbuilding period has been extended for a second time this week to Friday.

The retail portion will be launched on Monday and close on Thursday, with listing now targeted for 30 July. RCom had set a price range of $1.09 to $1.32 for the IPO.

The company has already got the approval of Singapore exchange to list GTI Trust, which may sell between 642.2 million and 757.6 million units and will have a market capitalisation of $1.268 billion to $1.535 billion as per the price range.

According to analysts, RCom had net debt of $6.5 billion (Rs35,800 crore) on its books compared to total annual revenue of Rs20,382 crore for the year ended 31 March 2012.

Last month, Canadian research firm Veritas downgraded Reliance Communications (RCom) to 'sell' and has slashed it target price by over 75 per cent to Rs15, which the Anil Ambani-promoted company termed as lacking credibility and is ''mala fide'' in intent and approach (Veritas downgrades RCom to sell; company terms report `mala fide')

GTI Trust owns four subsea cable systems that carry Internet traffic and data around the globe, according to a prospectus filed in Singapore on 5 July.