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Mumbai March 26 Reliance Communications has shortlisted four merchant banks for the initial public offer of its overseas subsidiary FLAG Telecom, which operates a global fibre optic cable network.

RCom will select from among Goldman Sachs, Morgan Stanley, Deutsche Bank and UBS to lead manage the IPO, said sources.

RCom will offload around 10-15 per cent stake in FLAG, which will list again on London Stock Exchange.

Before it was fully acquired by RCom (then Reliance Infocomm) in 2004, FLAG was listed on both NASDAQ and LSE.

The IPO proceeds will part-fund a $1.5 billion expansion plan for FLAG that involves the addition of 50,000 kms of `Next Generation Network' over the next three years.

After RCom acquired FLAG, it augmented it with a new network called FALCON connecting 11 countries in West Asia.

RCom is also planning an additional landing station for FALCON in Thiruvananthapuram in Kerala that will connect the Maldives, said sources. This will be in addition to FALCON's landing station in Mumbai and FLAG's landing station, also in Mumbai.

Reliance had acquired FLAG — which had filed for bankruptcy — for $207 million in early 2004.

More Stories on : Telecommunications | IPOs | Broadband | Reliance Communications Ltd

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